The Creso Pharma Ltd [ASX:CPH] share price is falling as ASIC probes EverBlu Capital, whose executive chairman also serves as CPH’s non-executive chair and co-founder.
CPH share price is currently trading at 11 cents per share, down 8.20%.
CPH management caught up in ASIC probe
CPH shares are under selling pressure today, following reports on raids of EverBlu Capital, a Sydney broker.
Adam Blumenthal — Creso’s co-founder and non-executive chairman — also serves as an executive chair at EverBlu.
As the Australian Financial Review noted, the exact nature of the investigation and purpose behind the raids are not yet publicly known.
Creso and EverBlu don’t only have Mr Blumenthal as a connection.
EverBlu was recently named CPH’s corporate adviser in a Creso options issue prospectus last month.
Today’s dip in the CPH share price may suggest some investors are worried the ASIC investigation could ensnare Creso management.
EverBlu’s spokesperson declined to comment on whether ASIC’s investigation related to Creso.
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Creso releases response
Fielding questions from the ASX regarding the developments — which spurred elevated trading activity in CPH stock — Creso said it was not aware of any information that could explain today’s sell-off.
Regarding Mr Bluementhal’s involvement with EverBlu, Creso offered the following response (emphasis added):
‘The Company is aware of two articles published by the Australian Financial Review today, which reported that the Australian Federal Police were executing a search warrant at the Sydney offices of Everblu Capital, of which Creso Pharma Limited’s Chairman, Adam Blumenthal, is a director.
‘The Company is yet to be able to independently verify the nature of the enquiry or determine whether the matter relates to Creso Pharma Limited.
‘The Company confirms, however, that it has not been served with any notices from any regulatory body in connection with the matter. As a result, the Company does not consider there to be any basis for it to make public announcement in relation to this matter. Otherwise, the Company is not aware of any other explanation for the recent trading in its securities.’
Clearly, the market will have to wait for more details to emerge from ASIC’s investigations to determine the extent — if any — of Creso’s involvement with the recent raids on EverBlu.
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