Article by Todd Campbell, The Motley Fool
Marijuana stock Aphria(NYSE:APHA) has been on the hot seat since December, when short-sellers levied allegations that insiders were self-dealing during recent acquisitions of marijuana assets in Latin America.
The accusations caused Aphria’s shares to plummet. They also prompted an internal investigation from independent members of Aphria’s board of directors.
This week came findings from that investigation that could help restore investor confidence. Here’s what the board-hired independent investigators discovered.
No. 1: Some things weren’t disclosed
The question at the heart of the investigation was whether insiders fully disclosed any conflicts to the board during negotiations to buy marijuana assets in Jamaica, Colombia, and Argentina.
It appears executives weren’t as open about their relationship with those assets as they should’ve been.
“As previously disclosed, the acquisition was approved by independent directors after obtaining a third-party fairness opinion, with the non-independent directors recusing themselves from the deliberations and voting,” the report stated. “Based on further information available to the Special Committee, it appears that certain of the non-independent directors of the company had conflicting interests in the acquisition that were not fully disclosed to the board.” (Emphasis mine.)