Namaste says firm is ‘solid’ as ex-CEO launches legal battle

TORONTO • Namaste Technologies Inc.’s interim chief executive is urging its shareholders to “ignore the rumours” as its ex-CEO commenced legal action against the cannabis company to prohibit his termination unless a “proper process” is followed.

According to court documents, Sean Dollinger on Feb. 5 applied for a permanent, mandatory injunction requiring Namaste and board members Laurens Feenstra and Branden Spikes to retract a news release that announced his termination from Namaste.

Lawyers for Dollinger also called for an injunction prohibiting Namaste’s board, or a committee or subset of the board, from removing him as a director or terminating him as CEO unless a “proper process in compliance with relevant statutes” is adopted and followed.

“I strongly object to the Special Committee purporting to have the authorization to remove me ... I am of the view that the Special Committee has exceeded its mandate and is purporting to take control of the board,” Dollinger said in an affidavit.

Shares of the Torontobased firm on the TSX Venture Exchange plunged on Monday after Namaste announced Dollinger’s firing, its plans to commence legal action against him and the launch of a strategic review process to examine its options, including a sale.

Namaste, which operates an e-commerce platform and a portal that connects patients to doctors, said the termination came after an investigation by a special committee of its board of directors, who looked into allegations raised in October by prominent short seller Citron Research. The company said it concluded that there were breaches of fiduciary duty by Dollinger and evidence of self-dealing, and his termination as CEO and removal from the board was in the best interest of Namaste.