Penny stock Nutritional Holdings has issued its fourth clarification announcement in the past six weeks, backtracking on its public statement that its loss-making dry foods division had been placed in business rescue.
The company, valued at R167m, grows cannabis in Lesotho under its Ukusekela division and also owns Nutritional Foods, which sells maize-based foods to schools and prisons and has posted losses for the past seven years.
Nutritional Holdings, whose shares were unchanged at 1c on Wednesday, stated on JSE news service Sens on February 25 that the food business had been placed in business rescue to “stop the haemorrhaging of funds”.
At the time it said: “Shareholders are advised that the board of directors unanimously agreed and passed a resolution to place Nutritional Foods into business rescue effective today.”
However, in a new twist, the group on Wednesday issued another statement saying it had sold the division to (Nutritional Foods’s) CEO Matthews Suping for R15.2m. It clarified that the food business had not been placed in business rescue.
Business rescue is a process governed by the Companies Act that ensures outside professionals are appointed to draw up a plan to save the firm in a designated time frame and work out how best to reimburse any creditors owed money.
Two weeks ago, Business Day asked the company for evidence that the division was in business rescue as Nutritional Holdings had claimed and asked the JSE if it was concerned about the accuracy of the public claims made by the listed company.
Nutritional Holdings on Wednesday said its February 25 statement was not accurate: “It is noted that, in fact, the Nutritional Holdings board did not pass a resolution, unanimously, but by way of a majority of the board.
“Nutritional Foods was thus technically not actually placed into business rescue at that point in time”.
The JSE has confirmed it is investigating the company and that information public companies publish should not be misleading.
JSE director of regulation Andre Visser said: “The listings requirements state that all parties involved in the dissemination of information into the marketplace must observe the highest standards of care in doing so.”
The group recently issued two statements distancing itself from a cryptocurrency it tried to sell shareholders in March in a bid to raise money for its fledgling cannabis business. It also issued a clarification statement last week explaining that its cannabis business had started exporting products to new clients later than initially planned due to the coronavirus pandemic.
Nutritional Holdings this week announced that founder and director Nikhyle Dasarath will no longer run its fundraising arm CannaCrypt, which sells a cryptocurrency of the same name to raise money for its fledgling cannabis operations.
Dasarath is also the founder of CannaCrypt.
The company said it was a conflict of interest for Dasarath to be a director of the listed firm and its cryptocurrency arm.
Cryptocurrencies are unregulated but legal digital tokens.
The JSE, the Financial Sector Conduct Authority (FSCA) and the Companies and Intellectual Properties Commission (CIPC) are investigating the firm.
The company’s sponsors, a requirement for all listed companies, quit in March. The business employed new sponsors, AcaciaCap Advisors, a few days later. The company’s CFO, Suzanne Meyer, who was appointed in November, stepped down in February.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.