Controversial penny stock Nutritional Holdings has released another update as it tries to comply with listing requirements, after almost being kicked off the JSE, with each update revealing yet another corporate governance failure and listing breach.
The company that once sold maize-based dry food to schools and was loss-making for years, has been suspended from trade — shareholders cannot buy or sell their shares, which were last valued at 25c after a consolidation of shares valued at 1c.
Nutritional Holdings said the sale of its dry foods business to a former director, which was due to take place, has fallen through, with the company now aiming to reincorporate it into its business.
It said it needs to recommission production facilities, while it appears not to be in control of the business and is trying to engage with its CEO.
“Steps have been taken to regain control over Nutritional Foods, and the executive directors of Nutritional Holdings are being appointed to the board of Nutritional Foods,” it said.
Its other division, Ukusekela, allegedly makes a cannabis supplement, but it is unclear if it actually does. Nutritional has not updated the market on its 2021 financial results or even who its product buyers are and what products it makes.
The JSE was considering kicking the company off the exchange due to multiple breaches of its rules, but last week Nutritional announced the appointment of a company secretary and designated adviser, part of the JSE’s minimum requirements.
It also announced a series of large share sales that it had failed to update the market on from as far back as 2019.
The saga of the small cap shows the JSE systems are in place, and JSE unhappiness with it is detailed in the statement.
The JSE was contacted by many shareholders from late 2021 who could not get hold of the company for months and began to become concerned. The investors’ anxiety worsened as results were not forthcoming and the company failed to report the resignation of the CFO and its advisory firm.
The board is now committed to updating the market timeously and more transparently than before, it said, acknowledging that its audited statements for the year to end-February 2021 and the interims to August 2021 are yet to be published.
The JSE will conduct a thorough review of the annual report, interim results and all other areas of compliance before it will agree to the lifting of the suspension from trade, Nutritional said.
It is now looking for a financial director, also required by listed firms, after the CFO’s resignation in November.
The board, which collapsed in 2021 after a series of resignations by audit committee members and the chair, is also in the process of being restructured, it said.
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