Chill Brands Group PLC (LON: CHLL, OTCQB: CHBRF) informed investors that its newly appointed board, which assumed control on June 4, has initiated an investigation into the actions of former chief commercial officer Antonio Russo and chief operating officer Trevor Taylor, who recently left the company.
The new board was installed following a shareholder requisition and vote at an EGM on June 4.
In a stock market statement, Chill Brands disclosed that during its initial review, it found that in May, Taylor and Russo took steps to transfer the registration of the Chill.com domain from the company to themselves without board authorization. This transfer was completed on May 31, 2024, without the board’s knowledge.
A board meeting on June 3, a day before the EGM, included a resolution proposed by Trevor Taylor to transfer the domain and certain trademarks to Chill North America LLC, controlled by Antonio Russo, along with a leaseback arrangement. However, no executable documents were presented to the board, and the transfer had already occurred, which was not disclosed to the board.
Chill Brands confirmed there is no current interruption to business operations in the domain.
The company’s shares were suspended on June 3 at the company’s request, due to its inability to update the market on its trading status.
The board’s initial findings suggest that any announcement or trading update prior to the suspension would have had to disclose the unauthorized transfer of the company’s major asset to an account controlled by Antonio Russo.
Additionally, Chill Brands discovered that on June 3, 2024, nearly $400k was transferred from the group’s US subsidiary bank account to the personal accounts of Antonio Russo and Trevor Taylor. These payments were unauthorized and not disclosed to the board during their meeting on the same day. The board is now seeking explanations and recovery of these funds through legal means.
Chill Brands is also investigating the involvement of certain advisers appointed by Russo and Taylor in these activities.
The board cannot yet provide a full trading and financial update and will not seek the restoration of trading of the company’s ordinary shares until they are able to do so.
“We are totally shocked by the extent of destructive behaviour and actions of Mr. Taylor and Mr. Russo. It is evident that they have not acted in good faith, motivated by self-interest rather than the benefit of the company or its shareholders,” said non-executive chair Harry Chathli.
“The company has commenced an investigation to uncover if any professional advisers or persons had assisted them in their actions to defraud the business. Shareholders can be assured that the current board will work unceasingly to ensure the restoration of trading of shares and regain the positive momentum achieved in the year to March 31, 2024.”
