Akanda Corp (AKAN)

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Akanda could lose its African subsidiary Bophelo amid dispute with former Executive Chairman

AKANDA’s wholly owned subsidiary Bophelo Bioscience, which operates the company’s key cultivation facility in Lesotho, has been taken into liquidation by the country’s high court in what the company is calling a ‘retaliation’ from a disgruntled former director.

The company is now scrambling to have the ‘unauthorised’ decision reversed, retrieve lost loans and prevent the South African business from falling into full-blown insolvency.

It comes just weeks after a dramatic shareholder revolt at Akanda, which saw its entire board of directors, bar its CEO Tej Virk, ousted from the company.

Behind these recent theatrics comes pressure from investors (who have seen share prices drop nearly 90% since early May) to accelerate the company’s path to profitability, a task Mr Virk told BusinessCann is now his main focus.

Now the company is launching legal action in an effort to prevent losing its operations in Lesotho entirely, and intends to convene a special committee to investigate Ms Mojela’s conduct.

Alongside bringing legal action against its former employee, Akanda says it will ‘pursue all of its available legal rights’ to reverse the liquidation, while seeking to recover ‘significant loans it has made to Bophelo’ to fund its business plan.

In an interview with Mr Virk held prior to the developments in Lesotho, he said that the millions in IPO funds that were earmarked for the development of Bophelo’s facility have been ‘put to work’.

He explained that ‘capital has been moving into the operation’, seeing the expansion of its postharvest capabilities, expansion of its covered outdoor cultivation capabilities, and the ‘perfection of growth methods for the greenhouses’ all taking place in Lesotho since March.

There has also reportedly been ‘a lot of work put into Lesotho’ to overhaul the company’s systems to ensure everything is compliant with European pharmaceutical standards.

Full Article https://businesscann.com/?p=8345