Why is the Creso Share Price Falling? (ASX:CPH)

The Creso Pharma Ltd [ASX:CPHshare 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%.

ASX CPH - Creso Share Price ChartSource: Tradingview.com

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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Regards,

Kiryll Prakapenka,

For Money Morning

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Kiryll Prakapenka is an investing autodidact who is passionate about conducting in-depth research on investments. Kiryll brings sound analytical skills to his work, courtesy of his Philosophy degree from The University of Melbourne. A student of legendary investors and their strategies, Kiryll likes to synthesise macroeconomic narratives with a keen understanding of the fundamentals behind companies.


Money Morning Australia