CBD company Love Hemp Group (Love Hemp) has reached a settlement following a confidential AQSE investigation after its shares were suspended from the exchange on 3 May, 2022 due to the resignation of its corporate advisor.
Love Hemp has been fined £100,000 by the AQSE which has been reduced to £70,000 for early resolution.
The company was ordered to pay the fine following an investigation after, on 8 February, 2022, Love Hemp released an announcement stating it had completed a fundraise of £2.060m. However, payments of some of the fundraise had been delayed for 20 days following the announcement.
Read more: Love Hemp sees sales drop by 16%, expects revenues of £3.6m
The AQSE stated that this “could be seen as false or deceptive and it omitted key information, which might have given a misleading impression to investors of the company’s financial position, as it did not make clear that certain participants in the fundraise were on delayed settlement terms and the funds had not been received by the company at the time of the announcement.”
Despite Love Hemp directors maintaining that they had no reason to believe the payment would not be forthcoming, an investor that had put forward £1.2m did not pay the funds and Love Hemp failed to provide an update to the market regarding the matter until 3 May.
The AQSE stated: “As such, investors had a false impression of the company’s cash position from the beginning of February until early May 2022.”
According to the AQSE, Love Hemp’s procedures, systems and controls were “insufficient to ensure that the announcements were completely accurate” and that “the company failed to make announcements and inform the market in a timely manner of its decision and the potential impact this may have had, nor was it able to provide any documentation (such as board minutes) to support its representations to AQSE in response to the Exchange’s enquiries.”
Chairman of Love Hemp Group, Graham Mullis, commented: “On behalf of the Board, we regret that Love Hemp has found itself in this position, however, I am pleased the company has been able to resolve the situation with AQSE and looks forward to appointing a new corporate advisor and lifting the trading suspension shortly.
“The company has strengthened its board, improved governance and controls and takes its responsibilities seriously as a publicly traded company.
“I would like to thank shareholders for their patience during this period and I very much look forward to communicating in due course the exciting plans the company has for building shareholder value.”
Love Hemp can now progress discussions with its proposed new AQSE advisor and expects to update the market shortly on the timing of when the trading suspension will be lifted.
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