Unhappy with Hexo’s financial and stock market performance, an Ontario investor wants a seat on the Gatineau pot producer’s board and offers a list of new directors.
Posted at 10:45 a.m.
Updated at 11:28 a.m.
Adam Arviv presents himself as CEO of Kaos Capital and says he holds a 2% stake in Hexo. He accuses Hexo’s administrators of having caused “massive destruction of value”.
In an open letter published Wednesday evening, he says he wants to propose five new candidates, including himself, for a seat on the board ahead of the shareholders’ meeting scheduled for March 8.
Adam Arviv says he’s been fighting a battle with Hexo executives since Hexo’s August acquisition of Redecan.
He claims that former chairman of the board, Michael Munzar, and ex-CEO, Sébastien St-Louis, “cheated” investors in Redecan and “destroyed” shareholder value by carrying out several financing transactions.
The administrators Vincent Chiara and John Bell are scratched in passing by Adam Arviv who accuses them of having been grossly negligent in the approval of these transactions.
The investor adds in his missive that the departure of Sébastien St-Louis in October was not enough to slow down the stock market slide since the title has lost more than 50% of its value since that day, he specifies.
“This must stop. The market has spoken and shareholders have made it clear that they have no confidence in the directors’ ability to turn things around. Without a monumental shift, the stock will continue its descent. »
Called to react to the words and intentions of Adam Arviv, the management of Hexo confirms that the board is examining its “submission”.
“The governance committee is currently preparing its recommendations on the composition of the board, with a view to communicating them to shareholders for consideration well before the next annual general meeting,” said a spokeswoman for Hexo.
The company representative adds that Hexo has fostered an “open and constructive” dialogue with Mr. Arviv in recent months.
“It is disappointing that Mr. Arviv has decided to embark on this unproductive, disruptive and costly process rather than continuing to work with the company under normal conditions,” she said.
“Mr. Arviv’s actions today are an unwelcome distraction. »
Last fall, BNN Bloomberg reported that Adam Arviv sent a letter to Hexo’s board in late September suggesting three candidates, including Vincent Chiara, to succeed Sébastien St-Louis as CEO. CEO. It was ultimately Scott Cooper who was named CEO.
Preferred supplier of the Quebec Cannabis Society (SQDC), Hexo was founded in 2013 by Sébastien St-Louis and Adam Miron. The head office was brought back to Gatineau last year after being relocated to Kanata, a suburb of Ottawa for a short period of time.