SkinBioTherapeutics (AIM: SBTX), shares plunged more than 40% on Monday, extending losses after a 50% fall on Friday, following what the company described as an alarming update to investors.
The skin health-focused firm said its board has been urgently investigating the business since CEO Stuart Ashman resigned on Friday, having been suspended pending an inquiry into his conduct.
The company revealed that information received late last week has raised “significant doubt” over the validity of accrued royalty income reported in its most recent financial results. The payments, totalling £770,000, are now expected to be removed from the accounts.
SkinBioTherapeutics added that the board believes the former CEO may have misrepresented material information to directors, senior management, auditors and advisers.
Martin Hunt, Non-Executive Chairman, has assumed the role and responsibilities of Executive Chairman temporarily, and the focus of the Board and Leadership team is business continuity. The Board Investigation is confident in the quality of the management team, the future potential of the products and underlying businesses, all supported by a solid cash balance.
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