TORONTO — The ousted CEO of Namaste Technologies Inc. is threatening to take legal action after the cannabis company's board of directions removed him from the position and launched a strategic review process to examine its options.
"I intend to take immediate legal action to begin setting the record straight and clearing any misconceptions caused by the inaccurate allegations levelled against me," Sean Dollinger said in a news release.
Dollinger added he was disappointed by the move against him after having devoted years to building the company alongside co-founder Kory Zelickson.
"What saddens me most is that for the time being, I will not be able to continue steering the incredible journey of growth for the company's wonderful shareholders and investors, who believed in me and what we were creating."
The Toronto-based firm which operates an e-commerce platform and a portal that connects patients with doctors said Dollinger's termination from the CEO's position came after an investigation by a special committee of its board of directors, who looked into allegations raised in October by prominent short seller Citron Research.
Namaste concluded there were breaches of fiduciary duty by Dollinger, its largest shareholder, and evidence of self-dealing. It announced plans to commence legal action against him.
"In light of these findings and the special committee recommendations, the board concluded that it is in the best interest of Namaste that Sean Dollinger be terminated from his role as CEO for cause and removed as director of the company."
Namaste's stock fell in the wake of the news by as much as 27 per cent to $1.01 on the TSX Venture exchange, from its previous close of $1.38. The shares closed down 20 cents or 14.5 per cent to $1.18.
Meni Morim has been appointed interim CEO of Namaste.
Namaste said it had a "recent expression of interest" and its board has initiated a formal strategic review to consider all "value-maximizing alternatives" which could include a sale of the company or other transactions.
It is in the process of engaging an investment bank to advise a special committee of the board overseeing the process, it added.
"Namaste remains in a strong financial position, with cash balances intact, and will continue to execute on its unique and effective business strategy. The company will provide an update regarding the outcome of the strategic review process once it has concluded."
Companies in this story: (TSXV:N).
The Canadian Press