Kitty litter blend and a police escort marks the wind up of marijuana company Medical Kiwi. Photo / 123RF
Kitty litter blend and a police escort marks the wind up of marijuana company Medical Kiwi. Photo / 123RF
The wind-up of failed medical marijuana company Aether Pacific Pharmaceuticals, formerly known as Medical Kiwi, commenced recently with an unusual job for its liquidators.
Peter Drennan of Waterstone and two contractors spent hours at the company’s leased Christchurch site, shredding piles of unsalable dried marijuana stock, including sample runs andincorrectly labelled product, as well as marijuana leaves cleared from the facility’s grow room.
The finely ground result was then mixed with kitty litter and coloured dye to render it unusable, according to Ministry of Health stipulation. It was then bagged and borne away in the boots of two New Zealand police sedans.
“It’s dusty, unpleasant work…and no, it’s not something I’ve ever done before,” Drennan told the Herald.
A second category of marijuana waste — including excess biomatter and plant stalks — was collected from the site by the Ministry of Health and sent to a facility for medical waste to be burned and buried.
Some 400kgs of saleable marijuana (processed, dried and packaged) was sent to a licensed location, and will be sold through a tender process, Drennan confirmed. Only Ministry of Health licence-holders will be allowed to bid.
Medical Kiwi entered liquidation on February 4 following a watershed meeting of creditors.
“There was no viable path to restructuring the company’s debts” the first liquidator’s report, released late Monday, said.
Company debts total $8.7 million, and its assets appear unlikely to amount to more than several hundred thousand dollars.
The list of secured creditors is topped by Australian-based Emichrome. Owed $4.5m, it is the private, family company of Malaysian-born Kie Chi Wong. Forbes identifies Wong as a billionaire.
Other secured creditors include: medical marijuana grower Puro New Zealand; Jason Whitelaw, former contractor to Aether; UDC Finance; and Beyond Capital Limited Partnership, which facilitates foreign investment in New Zealand businesses.
The liquidator’s report also shows preferential debts of $149,069 owed to Inland Revenue and $51,822 owed to employees.
The majority of the company’s plant equipment and machinery sold to a single buyer in recent days for $200,000 plus GST.
Remaining assets are intellectual property and inventory; their value has not been estimated but it is not thought to be considerable.
The auction of the plant equipment was controversial. Some company creditors and employees have voiced concerns that Aldo Miccio, executive chair of Aether and a former mayor of Nelson, has been preparing to “phoenix” the company in some form, and could be behind the equipment purchase — there are rules around how and under what circumstances directors of failed companies can buy the assets and rebuild a similar business.
Drennan declined to release the buyer’s name. “In this instance the buyer does have a reasonable expectation of privacy,” he said.
However, he noted that before accepting the offer, he sought and received confirmation from the Aether board that the buyer was not affiliated with them. He said he could “also confirm that the [buyer] entity does not have any apparent links to any of the former directors or creditors.
Companies House records in the UK show that late last year Miccio, along with UK resident Mohammed Khan, registered a company called Nueather. However, in late January, coincidental with published reports of Aether shareholder and creditor anger, Miccio resigned as a Nueather director.
Miccio did not immediately respond to the Herald’s request for comment.
Aldo Miccio, chairman of Medical Kiwi.
Miccio has a chequered business history, including close involvement with two other failed companies in recent years.
He was managing director of Australian company Kela Charms from early 2017 to December 2019. A month after his resignation, the company entered voluntary administration with debt that outstripped the value of assets by several million dollars. It was subsequently kept as a going concern entity through a plan of arrangement with creditors.
Miccio also co-founded New Zealand Coastal Seafoods (NZCS) in late 2016. He remained a director of the company until its collapse and liquidation last year. Its debt outstripped assets by some $9m.
Aether director Peter Win was also a co-founder and director of NZCS.
In 2020, under Miccio’s chairmanship, Medical Kiwi, as it was then, raised millions from investors while touting its Ministry of Health licence. However, the Herald revealed the company has misled investors; it never had an active licence, the terms of its licence were never fulfilled, and, in addition, that inactive licence expired while the company’s fundraising efforts were ongoing.
Medical Kiwi was ultimately fined $250,000 by the Financial Markets Authority, and was later denied a listing by the NZX.
The liquidator’s report noted that the investigation into the company’s affairs continues, including a detailed review of financial records, bank statements, and other relevant documentation.
The liquidator aims to complete this preliminary investigation within a month.
