The chair and audit committee members have resigned from small cap Nutritional Holdings, it said in an overdue update to the market that suggested the company is close to collapse.
The news of the board collapse comes days after Business Day reported that the JSE was considering terminating Nutritional Holdings’ listing as it had not updated investors about losing its legally required designated sponsor in December and had not appointed one as legally required.
It was also behind in releasing its annual financial statements and annual report.
Previous reporting delays and inaccuracies led to the firm — which once sold maize-based food to schools and prisons — being suspended from trade in May 2021. Now it is faced with losing its status as a publicly traded company.
The JSE said it had struggled to reach the company. Shareholders turned to the media after being unable to reach anyone, including chair Althea Grewar, for months.
On Wednesday, Nutritional Holdings said Grewar, who is CEO of jewellery firm Luxe Holdings, had resigned three months ago, but the company failed to announce this in November, leaving her facing a deluge of shareholder queries.
The company, which has said it sells a cannabis supplement to unnamed customers in Germany and Japan, blamed the resignations, the holidays and the fact its CEO and financial manager had contracted Covid-19 for failing to issue regulatory updates. It also admitted that the JSE told it on January 24 of plans to terminate its listing. It is making representations to convince it otherwise.
Nutritional’s statement admits it needs a new strategy and directors. “Shareholders are advised that Nutritional Holdings is currently undergoing a board restructuring, which will include resignations and new appointments, and is also expected to result in the injection of additional funding into the group and a new strategy,” it said.
The CFO resigned in November only a few months into the job. It appears CEO Nikhyle Dasarath is one of the few people left at the firm.
Shareholders who spoke to Business Day are concerned they have lost money. It is not clear how much was invested in the firm.
The JSE said last week if Nutritional Holdings cannot find a corporate sponsor, which is required to help firms navigate the legalities of being listed, it will be kicked off the exchange. Nutritional had three different sponsors in 2021.
Nutritional failed to appoint a sponsor after the previous one resigned in December, the update clarified.
The company, however, seems optimistic that by February 17, it will not only find a corporate sponsor, but will release its delayed audited financial statements and will have new board members.
By late February, it said, it will also explain why the JSE should not terminate its listing and will simultaneously apply to have the company’s suspension from trade lifted.
Nutritional Holdings raised eyebrows in early 2021 after it issued what it called the world’s first cannabis cryptocurrency, CannaCrypt, a digital token to raise money for its cannabis business. In an email riddled with spelling and grammar mistakes, it promised that investors who bought the digital token would see R20,000 transformed into R2.4m in 10 years.
It is not clear what happened to the money raised by the sale of this digital coin.
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