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  • Writer's pictureTed Ohashi

Aphria (TSX: APHA) corporate culture built on lies and deception

Regular readers will recall that then CEO of Aphria (TSX: APHA) (NYSE: APHA) promised shareholders a line by line rebuttal of the claims made by Hindenburg Research in a report titled “Aphria – A Shell Game with a Cannabis Business on the Side and a presentation by Gabriel Grego of Quintessential Capital Management (QCM) on December 3, 2018.

Vic Neufeld, promised a line by line rebuttal of these reports on Wednesday December 12, 2018. On December 28, 2018 I said, “APHA has many allegations to answer but these are not Health Canada issues for the most part. Their problems are with the investment industry regulators: the Securities & Exchange Commission, the New York Stock Exchange, the Investment Industry Regulatory Organization of Canada and the Toronto Stock Exchange.” Recently, Marketwatch said it asked an Aphria spokeswoman about the promise and was told the promise was made by Vic Neufeld personally and not by the company.

This response does not hold together. If a person is a Director and Chief Executive Officer of a company, and he makes a promise of corporate action announced either through a formal press release or in a somewhat more informal setting such as the media, social or otherwise to try to separate the person from the company is like cutting the baby in half. It can’t be done.

Even so the regulators will sit on their hands and look the other way. What that means is at any time in the future, the words of a CEO or senior corporate executive can be parsed as speaking for himself and not the company he operates. That is why on rare occasions when a senior executive expresses a personal opinion, they make sure it is clearly understood.

What I take from this is almost everything that the Hindenburg and Quintessential reports claimed must have been true. Aphria was a company with a corporate culture build on an apparent combination of lies and deception that, based on their spokesperson’s response, continues today.

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