Aphria names panel to probe asset purchases
A forensic analysis firm that short sells companies continued its attack on beleaguered Leamington, Ont. cannabis producer Aphria Inc. on Thursday, releasing another round of allegations involving shell games and backroom deals.
Aphria released a statement early Thursday, before the new allegations went public, stating it had appointed a “special committee” to review the company’s recent acquisition of its Latin American holdings. Those assets were one of the targets of the first set of claims from Hindenburg Research, which alleged Aphria is a “black hole” that enriched insiders at the expense of shareholders and wasted hundreds of millions of dollars on worthless acquisitions.
The research firm sent out a second volley in the afternoon. “Our examination of Aphria led to another Aphria-backed company, Liberty Health Sciences, where we uncovered multiple irregularities that raise more questions around believed undisclosed insider self-dealing,” Hindenburg alleged.
Aphria CEO Vic Neufeld and other company executives were unavailable for comment.
Hindenburg says Liberty acquired a Florida property this year. But rather than just buying the assets, it said, they were acquired through a newly formed entity, “netting the shell holders an estimated C$5 million gain in 6 days.”
In its statement Thursday morning, Aphria called the first round of allegations from Monday “inaccurate and misleading.” Aphria shares rebounded Thursday after news of the special committee was released. The stock had fallen for three consecutive days after the short-seller claims went public earlier this week. Its shares ended Thursday at $7.55, up 51 per cent.