01:51 PM EDT, 07/08/2024 (MT Newswires) -- DRI Healthcare demanded Behzad Khosrowshahi's resignation as a result of an ongoing investigation of irregularities related to certain alleged consulting and other expenses he presented for reimbursement. Chris Anastasopoulos was also been suspended with pay as CFO of the Trust and CFO of DRI Healthcare pending the outcome of the investigation, notes National Bank.

Shares are down 28.5% to $10.90.

The Board has appointed Gary Collins as interim CEO of the Trust in addition to his role as Chair of the Board, whilst DRI Healthcare (managing entity, also known as DRI Capital) named Ali Hedayat as its interim CEO; DRI Capital is the external manager. Chris Anastasopoulos' position will be filled in the interim by Sandy Kwan, previously acting as DHT's VP of Finance.

The total sum of the irregular expenses is believed "with some confidence" to amount to ~$7.5 million, which would be a non-material amount for the trust, notes National Bank and will be reimbursed by the external manager, DRI Capital, says analyst Zachary Evershed.

However, questions remain surrounding the void left by Behzad Khosrowshahi and the competencies required to fill it. "We believe this will likely sow doubts as to the value ascribed to the growth potential of the trust, and this is the likely main source of downside to unit value."

Evershed is encouraged that Ali Hedayat, who has been involved in all aspects of running the business, remains on board, and notes the deliberate effort to deepen the bench under Chief Investment Officer Navin Jacob, beefing up the IP diligence and forecasting/modeling teams.

DRI Healthcare is rated Outperform, with a $23.50 target.

Price: 10.90, Change: -4.34, Percent Change: -28.48