Mawson Infrastructure refuses to issue 1.35 million restricted stock units (RSU) to its former CEO James Manning after an internal investigation concluded that he failed to disclose related party transactions.
The Pennsylvania-based bitcoin mining firm said in a filing on Friday that its Audit Committee determined that there is “a prima facie basis to conclude that Manning did not fully and properly disclose his related party transactions to the Company,” adding:
Based on this determination, the Board resolved on Feb. 19, 2024, that certain RSUs and other equity grants provided for in Manning’s May 2023 Separation Agreement should not be issued by the Company.
Mawson announced Manning’s resignation from his role as CEO and president on May 22, 2023, and the appointment of Rahul Mewawalla as the new CEO. Manning remained a non-executive director until Aug. 22 when he resigned from that role.
The separation package for Manning included $1.3 million in cash benefits and the pending issuance of 1.35 million new RSUs. Based on Mawson’s stock price as of last Friday, the RSUs would be worth some $2.2 million.
Although Mawson stated that Manning’s resignation was not due to disagreements, the company disclosed in its Q3 filing in November that its Audit Committee had initiated an investigation into his related party transactions and alleged failure to disclose them appropriately.
Mawson listed several transactions during Q3 between itself and several companies where Manning is a “significant stockholder.” The transactions totaled nearly $1.3 million relating to Mawson’s administrative costs for office, tax advisory, accounting, and freight services.
In the filing on Friday, Mawson said Manning repeatedly refused to provide complete disclosure of his related party transactions or confirm the accuracy of prior related party disclosures.