Struggling UK CBD company Chill Brands Group PLC has halted trading of its shares due to internal conflicts among board members and executives.
In a June 10 announcement, the company said it has launched an investigation into two directors who it claims tried to “defraud” the business. Chill has accused Antonio Russo, chief commercial officer, and Trevor Taylor, chief operating officer, of seizing the company’s Chill.com website and transferring £314,000 ($400,000) to their private bank accounts in the United States without approval from the board.
That was after the company said in a June 3 announcement that it halted trading to deal with “allegations that had been raised around the use of inside information” by CEO Callum Sommerton. The allegations left its board “unable to currently provide the market with an accurate update of its financial and trading position,” the company said, according to media reports.
Russo and Taylor were left in control of Chill after Sommerton was suspended in April. Following an investigation, Sommerton was reinstated as chief executive on June 4 and launched a subsequent probe which discovered the domain and money transfers were made during his suspension.
Chill Brands said investigations ongoing regarding a number of deals related to its vape business, a sector the company entered with new products last year, also contributed to the trading stoppage.
Harry Chathli, non-executive chairman of Chill Brands, said the company’s board was “totally shocked by the extent of destructive behavior and actions of Mr. Taylor and Mr Russo.”
“It is evident that they have not acted in good faith and their actions have been motivated by self-interest rather than for the benefit of the company or its shareholders,” said Chathli. Chill is also investigating to see “if any professional advisers or persons had assisted them in their actions to defraud the business.”
According to the June 10 announcement, Eric Schrader, a non-executive director who had worked as an independent contractor for the company, has stepped down effective June 30.
Chill said it will try to recover the money transferred to Russo’s and Taylor’s bank accounts “through all legal means available” and “the Board will take appropriate action in relation to any misfeasance.”