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The chairman of one of Australia’s top cannabis companies has stepped down today after it was revealed the corporate watchdog was looking into “suspected contraventions” by Creso Pharma (ASX: CPH), likely connected to an investigation into stockbroker EverBlu Capital.
Creso exited a trading halt today with the news, announcing chairman and co-founder Adam Blumenthal offered to stand aside from his role in order to “distance Creso Pharma’s operations and governance from the ASIC investigation”.
The company has accepted his decision, noting executive James Ellingford will act as interim chairman in the meantime.
Further, the board of directors has established a standalone sub-committed comprising Ellingford and the company’s director and co-founder Boaz Wachtel to address and respond to the Australian Securities and Investment Commission (ASIC) notice.
Creso’s update highlights it was served with a notice issued by ASIC on Monday, requiring it to “produce certain documents to ASIC in connection with an ASIC investigation”, which it believes to be the result of common directorships between it and its corporate adviser EverBlu Capital.
The offices of EverBlu were raided by Federal Police earlier this month as part of an investigation being conducted by ASIC. Blumenthal is also the chair of EverBlu.
According to the cannabis company, the notice identified that ASIC’s investigation includes suspected contraventions by the company, its officers, agents, employees and representatives in relation to trading in its securities.
The notice also confirmed that it “should not be construed as an indication by ASIC that a contravention of the law has occurred, nor should it be considered a reflection upon any person or entity”.
“Importantly, the existence of the ASIC investigation does not impact on Creso Pharma’s ability to continue to operate efficiently,” Creso said.
“The company notes that its key business operations in Canada and Switzerland are each managed by in-country senior executives who have been quarantined from this matter and, as such, those operations remain unaffected and are operating as usual."
Shares in Creso are down 6 per cent to $0.094 per share at 2.44pm AEDT.
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