A boardroom stoush at eSense-Lab is heating up, with the board firing an extraordinary shot at its corporate advisor Otsana Capital and former chairman.

eSense-Lab is a “life sciences” play trying to reverse engineer high-value compounds from plants such as cannabis in a cost effective and sustainable way.

But the pot stock has recently been embroiled in a dispute with rebel shareholders.

The eSense-Lab board said in a letter to shareholders — released today to the ASX — that current boardroom problems were caused by former chairman and Otsana director Brendan de Kauwe.

Mr de Kauwe was ousted in February but he remains on the board.

Mr de Kauwe told Stockhead today that he has started defamation proceedings against the other board members of eSense-Lab.

Taking control

eSense-Lab was “dealing with an attempt to seize control by entities associated with corporate adviser and broker Otsana Capital”, the company said in the ASX announcement.

eSense was “dealing with an attempt to seize control” by entities associated with Otsana the company said.

The rebel group wants to put on the board Otsana managing director Faldi Ismail, former MMJ Phytotech managing director Andreas Gideon, Timothy Wise, and keep Otsana director Mr de Kauwe.

The rebel group, which includes Israeli investors Romfal Sifat, Buzz Capital and Attollo Investment, is concerned about the vesting of performance rights on deals that in their view did not meet the hurdle.

The ASX also questioned this in February and the eSense-Lab board has since quarantined the shares resulting from those rights.

The group is also concerned about the exit of key personnel, the delay in the AGM date, and the lack of Australian representation on the board.

eSense shares (ASX:ESE) over the past year.
eSense shares (ASX:ESE) over the past year.

Board claims

The board claims that Otsana and Mr de Kauwe have made ultimatums since the IPO that it “considers unwarranted”.

In the letter, the board claims Mr de Kauwe pressured it to postpone the original November AGM “because the company did not agree to the remuneration that he demanded” and then he and Otsana threatened to cancel planned capital raising activities.

The original AGM was postponed to allow a $500,000 investment from new investor MMJ Phytotech that took place in mid-November to be ratified by shareholders, instead of holding a second meeting.

The AGM has been postponed three times and is now set for March 29, a date mandated by an Israeli court after Mr de Kauwe and his colleague Quentin Megson started legal proceedings against the company.

The board claims Otsana tried to change the terms of its agreement with eSense-Lab.

“It again became clear that Otsana was withholding the capital raised until it was satisfied that all its demands and terms were met,” the board said in its letter.

Among a list of nine points, the board also claimed that Mr de Kauwe “refused to transfer funds from eSense’s Australian bank account” and “ignored a board resolution to implement the amendment of the company’s signature rights with regards to the Australian bank account”.

The board says that an auditor was appointed on March 7 to look into various aspects of Mr de Kauwe’s conduct in relation to the company, including his use of the company credit card, and that once the investigation is completed the results will be reported to shareholders.

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