Vinyl Group Ltd (ASX: VNL) resumes trading after Federal Court clears cleansing notice issue

Vinyl Group Ltd (ASX: VNL), the Australian-listed music technology platform operator, has obtained amended court orders from the Federal Court of Australia correcting an earlier procedural error in its cleansing notice compliance under section 708A of the Corporations Act. The legal development clears the way for the company to lift its voluntary trading suspension on the Australian Securities Exchange, which had been in place since June 2, 2025.

The amended order, granted by Justice Moore on June 6, 2025, rectified a minor but material error in the number of ordinary shares disclosed in the company’s original court filing, specifically adjusting the total issued to Realwise Group Holdings Pty Ltd by 18 shares. With the cleansing notices now formally lodged and the amended documentation in place, Vinyl Group Ltd has requested that the ASX lift the trading suspension effective immediately.

Why was Vinyl Group Ltd suspended from the ASX?

Vinyl Group Ltd voluntarily suspended its securities on June 2, 2025, citing a compliance lapse related to the lodgement of cleansing notices for multiple tranches of share issuances. The shares were issued to a range of individuals and institutional entities, including former executives, private investors, and strategic partners such as Songtradr, Inc., through the exercise of options and conversion of convertible notes. Under section 708A(5) and 708A(6) of the Corporations Act, a cleansing notice must be filed within five business days of share issuance to permit the immediate on-sale of those shares without a prospectus. Vinyl Group’s failure to meet this timeline exposed the affected trades—and any downstream sales—to potential non-compliance, placing the company and recipients at legal and regulatory risk. To mitigate this, Vinyl Group Ltd applied to the Federal Court for relief under section 1322 of the Corporations Act, which allows procedural errors to be remedied if doing so does not result in substantial injustice.

What did the Federal Court rule and why was the order amended?

Justice Moore of the New South Wales Registry approved the company’s original application on June 5, 2025. The court’s detailed order validated nine separate tranches of share issuances between March 2024 and May 2025, involving more than 90 million fully paid ordinary shares. These included issuances to stakeholders such as Linda Jenkinson, Robert Kenneth Gaunt, Stephen Gledden, Jorge Nigaglioni, Ben Katovsky, and the aforementioned Realwise Group Holdings Pty Ltd.

The June 6 amendment was necessary after Vinyl Group Ltd discovered a discrepancy in the figure cited for shares issued to Realwise—changing the count from 52,361,261 to 52,361,243. The revised order also included clearer language about the dual nature of the issuance: combining both option exercises and convertible note conversions. The court exercised its discretionary power to retrospectively deem the cleansing notices effective as of the original share issuance dates. Importantly, the orders also absolved all relevant stakeholders from any civil liability for potential disclosure breaches stemming from the administrative oversight.

What are cleansing notices and why do they matter under Australian law?

In the Australian capital markets framework, cleansing notices serve as formal declarations that securities issued without a prospectus can be traded freely by the recipients. They rely on the issuing entity already being compliant with continuous disclosure obligations under ASX Listing Rules and the Corporations Act. Without such notices, recipients of newly issued securities may be legally prohibited from reselling the shares on the open market, particularly if the transaction would otherwise trigger sections 707 or 727 of the Act. In Vinyl Group’s case, the failure to issue timely notices meant that over 90 million shares were technically “tainted,” placing buyers and on-sellers in potential breach of Australian securities law. The Federal Court’s retrospective validation eliminates this concern and restores legal certainty to prior and pending trades.

How did investors react to Vinyl Group’s suspension and resolution?

Vinyl Group Ltd shares have remained stagnant at AUD 0.13 since the trading halt, with no volume recorded since June 2. However, prior to the suspension, the music technology company had seen its stock rise 25.26% over the past 12 months, reaching a 52-week high of AUD 0.159 and a low of AUD 0.082. The firm currently has 1.26 billion shares on issue, giving it a market capitalization of approximately AUD 163.75 million.

Investor sentiment around the suspension appeared restrained, with most forum discussions and professional investor platforms framing the issue as a manageable compliance lapse rather than a material governance failure. Market observers noted that the company acted promptly and transparently in both disclosing the error and securing court relief within four days. Institutional reaction remains neutral to slightly positive, with the legal fix restoring confidence in share liquidity and trade compliance ahead of the expected trading resumption.

What is Vinyl Group Ltd’s business model and platform portfolio?

Vinyl Group Ltd, formerly operating as Jaxsta Ltd, has transformed into a multi-platform music and media technology operator. The company offers digital infrastructure solutions for the creator economy, focusing on verified data, social networking, e-commerce, and collectible innovation.

The company operates several synergistic platforms. Vinyl.com is the group’s premier e-commerce storefront, offering over 50,000 physical music titles to global customers. Vampr serves as a social-professional networking app tailored for musicians, producers, and industry stakeholders, with a footprint spanning more than 180 countries and 1.4 million creators. Jaxsta is the firm’s crown jewel in the data vertical, touted as the world’s largest verified music credit database with over 380 million indexed records that serve publishers, rights holders, streaming platforms, and metadata engines. Serenade brings Web3 functionality into Vinyl Group’s ecosystem, allowing artists to mint and sell limited-edition digital and physical collectibles. The platform has onboarded more than 200 artists globally. Vinyl Media, the company’s publishing arm, manages some of Australia’s most culturally influential media brands including Concrete Playground, Mediaweek, and Tone Deaf, in addition to licensing major international mastheads such as Rolling Stone, Refinery29, and Variety for the Australian market.

Through these interconnected businesses, Vinyl Group Ltd aims to build a vertically integrated music-tech powerhouse that connects creators, fans, and commercial partners across both legacy and next-generation platforms.

What is the outlook for Vinyl Group Ltd after trading resumes?

Analysts familiar with the music technology space note that Vinyl Group Ltd occupies a unique niche by integrating verified data infrastructure with Web3 innovation and direct-to-consumer distribution. Its ability to monetise both creator tools and consumer-facing content is seen as a potential strength in a post-streaming, rights-optimised industry model.

Now that the cleansing notice issue is resolved, institutional and retail investors are likely to shift focus back to operational metrics such as user growth across Vampr, subscription revenue from Jaxsta API integrations, and Web3 product uptake via Serenade. The company’s strategic trajectory includes deeper integration across its platforms and increasing monetization of its proprietary database. M&A or strategic partnerships remain a possibility given the emerging trend of music-tech consolidations, particularly involving social audio, NFT-linked collectibles, and AI-enabled discovery tools.

However, the market will also closely watch how Vinyl Group Ltd strengthens its internal compliance processes following this legal detour—particularly with regard to disclosure timelines and corporate governance routines.

Future compliance and corporate governance signals

While the court’s ruling absolves Vinyl Group Ltd and its stakeholders from legal liability, the episode serves as a cautionary tale for other ASX-listed tech and media firms operating in fast-growth sectors. Errors in regulatory compliance, even if inadvertent, can significantly disrupt shareholder confidence and limit market participation. Experts suggest that companies issuing large volumes of securities across staggered timelines—especially involving convertible notes or strategic investor onboarding—should implement automated compliance systems or legal oversight checklists tied to ASX and Corporations Act obligations. The company’s swift legal response, transparency in communication, and procedural diligence in seeking relief may, however, bolster its reputation among governance-focused institutional investors.