A NAMING mixup prompted Australia's main stock exchange operator to incorrectly tag one of the country's top internet providers in an unrelated company's takeover announcement, triggering a share selloff and a demand for an explanation.
The mistake builds on a perception that ASX Ltd is accident-prone following a delay-plagued software upgrade that was scrapped after five years and a series of technical glitches which halted share trading, in one case for nearly a day.
The securities regulator launched a probe into the "governance, capability and risk management" at the exchange in June citing its and the Reserve Bank of Australia's concerns about "repeated and serious failures" at the company.
Before the start of trading on Wednesday, ASX published a filing from listed automotive software company Infomedia saying it had agreed to a A$651 million ($423 million) buyout by TPG Capital Asia, the private equity firm, but the filing included a stock market code for TPG Telecom, Australia's No.2 internet provider.
Shares of TPG Telecom fell more than 4% in the first 15 minutes of trading, wiping more than A$400 million from the company's market capitalisation, before ASX suspended the stock from trading and said it was cancelling the trades.
"The ASX made a serious error by incorrectly cross-referencing TPG Telecom's share ticker in a price-sensitive announcement completely unrelated to us," a TPG Telecom spokesperson said.
"We expect a full explanation of how the error occurred and what steps will be taken to prevent similar incidents in future."
ASX said it reached out to all market participants involved in TPG Telecom trades to notify them of the error before the shares resumed trading, and that the ASX CEO had sought out TPG Telecom's CEO to apologise directly.
"This issue arose from an inadvertent human error and I recognise that it has caused disruption for TPG Telecom and its investors," said ASX group executive for markets and listings, Darren Yip.
"This mistake shouldn't have happened and we are reviewing our internal processes to understand if there are additional safeguards or procedures we could implement."
TPG Telecom shares were down more than 3% when they resumed trading mid-session, against a modestly higher overall market .
The Australian Securities and Investments Commission has hired an external panel to investigate the ASX and has said it will publish findings on an unspecified date.
ASIC was not immediately available for comment on Wednesday. ($1 = 1.5401 Australian dollars) - Reuters
