LEAMINGTON, Ont. — Cannabis producer Aphria Inc. says a review of its governance procedures revealed certain non-independent directors had conflicting interests in its acquisition of several Latin American companies.
The company said Friday that a separate review of the takeover of the companies in Jamaica, Argentina and Colombia found the purchase price for the deal to be within an acceptable range, and assets for all three companies were in place.
“The special committee’s findings give me and the board full confidence that it was executed at an acceptable value and is consistent with the company’s international growth strategy,” said the company’s independent board chairman Irwin Simon in a statement.
Aphria launched the reviews after short-sellers alleged in December that the acquisitions totalling $280-million were “largely worthless” and the purchase price “vastly inflated” to benefit insiders.
The company said it will adopt best practices to manage conflicts of interests, after it found some directors had not fully disclosed their conflicts to the board, as part of several recommendations put forth by the review committee.
The board will also be fully composed of independent directors once the company appoints a permanent CEO, the company said.
It said Simon will stand in as interim CEO starting March 1, which is when CEO Vic Neufeld and co-founder Cole Cacciavillani are set to leave the company. Aphria previously said the two would stay on as board members.
The company appointed Simon to the role of independent chairman in late December as part of the company’s efforts to enact best practices.
The corporate restructuring comes as the company faces a hostile takeover effort from Green Growth Brands Inc launched in late December. Aphria said in early February it had rejected the proposal as significantly undervaluing the company.
Aphria’s shares were trading up five per cent in midday trading on the Toronto Stock Exchange.
Companies in this story: (TSX:APHA)
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