The Cann Group Ltd (ASX: CAN) share price has returned from its trading halt and is crashing lower.
At the time of writing, the cannabis company’s shares are down 10% to 59.5 cents.
Why was the Cann share price in a trading halt?
On Friday Cann requested a trading halt pending the release of an announcement in relation to an investigation that the company is undertaking.
This morning Cann revealed that its investigation relates to a major cyber security incident which has cost the company dearly.
According to the release, the company has recently made payments of approximately $3.6 million to an overseas contractor. These payments were in relation to works being undertaken for Cann’s Mildura facility.
However, it turns out that those payments have been received by an unknown third party as a result of a complex and sophisticated cyber fraud perpetrated against the company and its overseas contractor.
Cann is now working with its bank to determine if any of the payments can be halted and if any of the funds involved are recoverable. It has also notified its insurance brokers to determine if a claim can be made to recover any of the losses involved.
Furthermore, immediate action has been taken to ensure the integrity of Cann’s IT systems.
What now?
Management advised that Cann is in a financial position to continue with its ongoing operations and projects irrespective of any funds being recovered. This includes the construction of its Mildura facility.
It is also investigating the incident thoroughly with its overseas contractor. This includes the engagement of external security and forensic IT experts to assist.
The matter has been reported to police in Victoria, the Netherlands, and Hong Kong, as well as the Office of Drug Control. Further updates will be provided in due course as the investigation proceeds.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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