The shares of a London listed vaping company were suspended after the board was unable to provide an “accurate” update on the financial situation, as the chief executive is still under investigation.
Chill Brands requested the London Stock Exchange on Monday morning to prevent investors from buying and selling its shares.
Amidst allegations of insider trading, the company stated that it needed more time to complete its investigation into Callum Sommerton.
Callum Sommerton has been suspended as the chief executive officer of Chill Brands after allegations “around inside information” were made.
Sommerton has been suspended after Fieldfisher was brought in by the law firm to investigate the allegations. This happened at the end April.
Chill Brands announced on Monday that it was conducting a second investigation, this time into a “number of commercial arrangements” that the company had entered into in connection with its UK vape businesses. No other details were revealed.
The board of directors stated that they “could not provide an accurate financial and trading update to the market at this time”.
Once the investigation is complete, the intention is to publish a “more comprehensive update” about how the company is doing.
Chill Brands’ nicotine-free Chill Zero disposable vapes, sold by retailers such as Morrisons and other large supermarkets, have been under increasing pressure from the government since its crackdown on disposable vapes. Before Monday’s suspension of its shares, they had already lost over 80 percent of their value in the last year.
In April, the crisis was exacerbated when Sommerton, the chief executive of the company, was abruptly dismissed after “inside information” allegations were made.
Sommerton who worked previously in the intellectual properties team of the law firm Mishcon de Reya said: “I’m surprised and disappointed at the allegations that have been made against me. I think they are without merit. I am confident I will be vindicated. “I will not make any further comments at this stage to allow the process progress.”
This initial investigation was launched shortly after a large shareholder sent a letter to the company calling for an investor meeting in order to revamp the board.
Jonathan Swann owns 13.5 percent of Chill Brands and wants to remove the two co-founders of the company: Chief Operating Officer Trevor Taylor and Chief Commercial Officer Antonio Russo.
Swann, in a letter he sent last week to other shareholders, accused the two of treating Chill “as though it was their private business”. He expressed concern about their salaries, the lack of progress made in the US, and the absence a chief finance officer.
Taylor, 43, Russo and 41 have both said they will resign by the end of September. However, a vote in London is being held on Tuesday to decide whether shareholders agree with Swann to accelerate their departure.
Swann, if he succeeds, has proposed that Aditya Chathli be appointed to the board. He is a former PR executive and was previously chairman of Yorkshire County Cricket Club.
Taylor and Russo told shareholders that the proposed appointment of new directors, “without the required experience or insight into the market, would effectively tie the company’s back”.
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