In a letter seen by Cannabis Wealth, Co-founder and major shareholder of Oxford Cannabinoid Technologies Holdings (OCTP), Gavin Sathianathan, has made an urgent appeal for sweeping changes to the company’s board of directors.
Chairman, CEO and director of GHS Capital Limited, Sathianathan, has addressed a letter to the non-executive chair of the board, Julie Pomeroy, following a series of regulatory and governance “failings”.
GHS Capital Limited holds 78,146,151 ordinary shares of £0.01 each in the issued share capital of cannabinoid pharmaceutical company OCTP – representing 8.14 per cent of the issued ordinary share capital. Sathianathan has stated in the letter he has a moral obligation to shareholders to take action.
As of 9 March 2022, OCTP was trading at a price of 1.35 pence per share, a discount of 73 per cent of its IPO price in May 2021 of 5 pence per share. In its letter, GHS details where the board has failed to comply with its regulatory requirements or to deliver on the strategic and corporate governance goals laid out in its IPO prospectus, which formed the basis of the associated fundraise in May 2021.
It follows GHS Capital’s request to convene a general meeting to replace certain members of the board after its “failure to conduct a proper discourse on the multitude of shareholder concerns”.
The letter outlines GHS’s proposal to address these “failings” and bring about the changes necessary for the efficient and effective operation of the company to the standards expected. Three new board members who have deep experience of cannabinoid drug development have been proposed.
The letter emphasises that OCTP’s credibility can only be restored with the appointment of directors who have the support and endorsement of a broad base of shareholders and the legitimacy that flows therefrom. It suggests that an experienced team of executive professionals must be hired under new leadership who should make it a priority to reduce expenditure and implement a compelling and cohesive strategy that maximises the company’s value creation potential.
OCTP announced on 4 March, 2021 that, following discussions with shareholders, it is already in receipt of irrevocable undertakings from holders representing approximately 46.5 per cent of the issued share capital of the company, deciding to vote against the resolutions proposed by GHS Capital Limited in its letter requisitioning a general meeting of the company, as announced on 18 February 2022.
Additionally, it stated that the company invited Mr Sathianathan to withdraw the requisition and that as it had not received a response, it will publish a full circular including a notice of general meeting.
Oxford Cannabinoid Technologies has said it has no further comments to add at this time.
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