Globe & Mail article: re Aphria special committeePosting since the article is "for Subscribers only"
Aphria appoints special committee to review transaction in short-seller report Aphria Inc., battling a short-seller’s report that has crushed its stock, said early Thursday its board has appointed a special committee of independent directors to review one of the transactions at the heart of the claims.
The committee will look at the $300-million acquisition of LATAM Holdings Inc., a company that owns cannabis assets in Jamaica, Colombia and Argentina. A report published Monday by U.S.-based short-sellers Gabriel Grego and Nate Anderson alleged that Aphria paid millions to buy assets with valuations that are “vastly inflated or outright fabrications.”
Aphria initially called short-sellers' allegations “false and defamatory,” and later noted that it has 100 employees in the three countries.
Aphria shares have fallen 52 per cent this week, closing Wednesday at $5 on the Toronto Stock Exchange
The Special Committee is composed of John M. Herhalt, Shlomo Bibas and Tom Looney. Mr. Herhalt, the company’s lead independent director and the chair of the Audit Committee, will serve as chair of the special committee.
All three joined the board at the company’s Nov. 2 annual meeting, after the LATAM deal closed in September. Mr. Herhalt is a chartered accountant and a retired partner from the firm KPMP with over 39 years of experience. Mr. Bibas is senior vice-president and global chief information officer at Celestica and a former partner at consulting firm Accenture. Mr. Looney recently retired as President of Diageo US Spirits & Canada.
Aphria said its special committee “is authorized to, and expects to, retain independent advisors to assist in its review.” It also said the committee was formed to “confirm the company’s belief that it conformed with all Company policies and generally accepted corporate governance practices.”
Vic Neufeld, Aphria’s Chief Executive Officer and chairman of the board, said in a statement, “We are committed to protecting our shareholders and restoring market confidence by confirming all the facts through an independent process to rebut innuendo and deception. Until then, it is business as usual at Aphria, as we continue taking significant steps to solidify our position as a premier global cannabis company.”