Man behind failed Christchurch medicinal cannabis firm opens new companies in UK

Monday, 16 December 2024

Aldo Miccio, executive chairperson of Medical Kiwi Ltd, and Mohammed Khan at the University of Birmingham in the UK. The pair established new UK companies shortly before Medical Kiwi entered voluntary administration.

The head of embattled medicinal cannabis company Medical Kiwi Ltd has resurfaced in the UK with new companies and intending to “carry on the plans that we have in place”, despite the Christchurch-based firm facing liquidation, owing creditors nearly $9 million and attracting new attention from the Financial Markets Authority (FMA).

Khan, left, and Miccio. Khan's UK company Nueheights Ltd had an agreement to develop IP around powderisation and encapsulation of medicinal cannabis.

Investors and former staff and directors of Medical Kiwi, also known as Aether Pacific Pharmaceuticals Ltd, this week told The Press of their disbelief at their new venture. Medical Kiwi entered voluntary administration last month citing “significant financial challenges”. “It absolutely disgusts me that they think they can just carry on,” one former investor said. “They’re taking all of that know-how and trying to emulate that in Fiji without any regard for the 1000 shareholders that have lost money. It just blows my mind.”

Executive chairperson Aldo Miccio, a former mayor of Nelson, registered a company called Nueather Ltd in the UK in October, along with Mohammed Khan, a Birmingham-based scientist who was working with Medical Kiwi developing technology to produce medicinal cannabis pills. Khan formed another UK company called Medcankiwi Ltd in September. Miccio’s fellow Medical Kiwi founder and director Peter Win does not appear to be involved.

Deputy Prime Minister of Fiji Manoa Kamikamica and Government stakeholders visit Medical Kiwi’s premises in Christchurch.

Khan did not respond to questions from The Press. In a statement on behalf of the Medical Kiwi board, Miccio did not answer questions about the nature or purpose of the UK entities, but said they “are not and could not be a phoenix company”. The board of the New Zealand company had been aware of the “ongoing future UK developments”, he said.

Fiji wanted to build a medicinal cannabis hub in a leased building in Denarau, in anticipation of new medicinal cannabis legislation. Two people are pictured here visiting Medical Kiwi’s premises.

At the same time, The Press understands Financial Markets Authority (FMA) staff have been in contact with investors, asking for information about disclosures and representations made by the company when acquiring shares and any evidence of “potential misrepresentation”. The FMA and Serious Fraud Office both declined to comment this week on whether they were investigating Medical Kiwi.

Fiji, which is exploring legalising medicinal cannabis, has loomed as a base for the company for some time. Aether Pacific Pharmaceuticals (Fiji) was registered in the island jurisdiction in April and Medical Kiwi signed a memorandum of understanding with the Fijian Government in May. In July, APP (Fiji) leased a building near Denarau where it planned to establish a “medicinal cannabis hub”, in anticipation of new legislation. A Fijian delegation ‒ including deputy Prime Minister and Minister for Trade, Co-operatives, Small and Medium Enterprises and Communications Manoa Kamikamica ‒ visited the company’s Christchurch base in September. About the same time, EY Fiji was appointed corporate adviser to the project.

Damien Grant, of Waterstone Insolvency, with cannabis plants at the Christchurch premises of Medical Kiwi Ltd, which entered voluntary administration on November 20.

The Fiji project was based on Khan’s work developing a pill form of medicinal cannabis. Medical Kiwi signed a deed of agreement with another of his companies ‒ Nueheights Ltd ‒ in July formalising this: “Nueheights has developed its own intellectual property concerning a liposome drug delivery system that can be put in powder form that shows great promise for drug efficacy and economic delivery”. The same month, Khan visited the Denarau facility to scope for renovations, which Miccio told shareholders in an update, “[would] outfit the facility for our encapsulation technology and extraction processes”. Three sources told The Press that, to complete the production cycle, Medical Kiwi and Nueheights were negotiating a joint venture with UK pharmacy chain Jhoots for distribution, in which Jhoots would acquire a minority stake in Medical Kiwi.

Now, all these elements remain, except the New Zealand part. Jhoots did not respond to emailed questions this week, but the company is West Midlands-based and Khan and Miccio’s UK companies are registered in Birmingham. On this, the board statement from Miccio said: “We cannot disclose any potential future partners of APP in the UK for commercial sensitivity and agreed non-disclosure reasons.”

Miccio says allegations about his UK ventures “are detrimental to the process of getting the best outcome for shareholders and staff” of Medical Kiwi.

Last week, Miccio emailed Fijian stakeholders informing them of the New Zealand company’s administration. “However,” he wrote, “It’s not all bad news. The Fiji company is not in administration and the plan is it won’t need to be as a DOCA [deed of company arrangement] which will recapitalise the company is being arranged…Our intention is to carry on the plans that we have in place.”

Miccio reiterated the Fiji plans “including the exciting nutraceutical hub” and those to salvage Medical Kiwi in his statement to The Press. The optimism around the latter may be misplaced. On Thursday, administrators Waterstone Insolvency told creditors they would formally recommend Medical Kiwi be placed in liquidation at a watershed meeting on February 4. “The realisable assets of the company, inventory and fixed assets will be sold off in the hope of securing enough funds to enable a distribution to preferential and secured creditors,” its report said.

Medical Kiwi’s premises in Middleton, Christchurch, has been closed and locked up since last month.

Medical Kiwi’s biggest liability is a $4.5m preferential security to Emichrome Proprietary Ltd ‒ the private family company of Malaysian-born Australian billionaire Kie Chi Wong. Any restructure would require Emichrome’s support and administrator Damien Grant told The Press it had not shifted from its position against that.

Also in doubt is the status of any IP advances under the Medical Kiwi-Nueheights agreement. The deed specified any developments would be provided to Medical Kiwi, along with “exclusive rights to utilise and commercialise”, from which Nueheights would earn a 6% royalty on sales revenue. In the board statement, Miccio said, “There is commercial sensitivity around all the IP you describe that will ultimately remain to the benefit of APP and accordingly its shareholders”. He did not specify if that meant the New Zealand or Fijian APP entity, or another.

The Fijian Ministry for Trade, Co-operatives, Small and Medium Enterprises and Communications did not respond to questions about Medical Kiwi’s plight or its implications for Fiji. Kamikamica addressed Parliament about progress on medicinal cannabis legislation last week. He did not mention Medical Kiwi. Miccio said the government, along with all other Fijian stakeholders, had been informed the New Zealand company’s administration.

One shareholder, who said they spoke to Miccio about Medical Kiwi’s solvency after he established Nueather in the UK but before the New Zealand entity entered administration, said he never mentioned either move.

“He’s basically used [Medical Kiwi] to get as far as he has and now he’s developed relationships with buyers and people with the technical knowledge and now he’s going to … just walk away from all the people who’ve put their life savings [in], while he swans off and sets up a new business.

“If there are no consequences then that's a sad reflection of the New Zealand justice system.”