Cann Group has insisted the construction of its Mildura facility will not be impacted despite the company being swindled out of millions of dollars by a “complex and sophisticated cyber fraud”.
An investigation has been launched after payments worth $3.6 million meant for a Dutch contractor vanished into “an unknown third party” account.
Cann went into a trading halt late last Thursday after detecting the cyber breach before releasing details to the market yesterday.
Cann said in a statement: “The company has recently made payments of approximately A$3.6m to an overseas contractor in relation to works being undertaken for Cann’s Mildura facility.
“However, those payments have been received by an unknown third party as a result of a complex and sophisticated cyber fraud perpetuated against the company and its overseas contractor.
“The company is working with its bank to determine if any of the payments can be halted and if any of the funds involved are recoverable.”
Cann is also in talks with its insurers to assess whether a claim can be made.
Cyber crime units in Victoria, the Netherlands and Hong Kong are investigating amid speculation the hackers could be China-based. It has also been reported to the Office of Drug Control.
Immediate action has also been taken to ensure the integrity of Cann’s IT systems, the company added.
Cann said the incident will not impact operations, regardless of whether any of the money is recovered.
“The company is in a financial position to continue with its ongoing operation and projects, including the construction of the Mildura facility, irrespective of any funds being recovered,” it said. “The company and its overseas contractor are investigating the incident thoroughly, including the engagement of external security and forensic IT experts to assist.”
Cann said further details of the fraud will be provided “as the investigation proceeds”.
While insisting its plans will be unaffected, it is an embarrassing security breach that leaves a sizeable hole in Cann’s finances, particularly if the money can’t be recovered.
“The company will have to find the money from somewhere,” one source told Cannabiz.
Cann’s share price remained steady at $0.66 at close of trade yesterday.
Cann is not the first company to fall victim to cyber fraud. One security expert told the Australian Financial Review it bore the hallmarks of a Business Email Compromise (BEM), cases of which have soared 100% over the past 12 months.