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Oxford Cannabinoid says co-founder to step down as chairman

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(Reuters) - Oxford Cannabinoid Technologies said on Friday its co-founder and top shareholder Neil Mahapatra would be stepping down as chairman after a firm controlled by him breached a lock-in agreement put in place ahead of the company's market debut in May.

Shares in the biopharmaceutical company, which focuses on developing cannabinoid-based prescription medicines for pain management, fell as much as 10% before paring losses to trade down 6% by 1455 GMT.

Mahapatra, who co-founded Oxford Cannabinoid in 2017 and owns a stake of about 21% in the publicly listed company, will move to a non-executive role from February. Existing independent non-executive director Julie Pomeroy will take over as non-executive chairman, the company said.

Oxford Cannabinoid also terminated its services agreement with Kingsley Capital Partners (KCP), the firm majority-owned by Mahapatra that was found to have breached the lock-in agreement, it said.

KCP in July accepted a 1 million pound ($1.35 million) facility from private banking group Brown Shipley & Co, Oxford Cannabinoid disclosed earlier this week, and five members of KCP pledged shares in the company as security for the loan.

Ahead of the IPO, KCP had promised not to dispose of shares for one year as a lock-in agreement. The granting of security is a disposal under that agreement and KCP entering into the facility without Oxford Cannabinoid's consent is a breach of the lock-in, the company had said.

($1 = 0.7430 pounds)

(Reporting by Yadarisa Shabong and Amna Karimi in Bengaluru; Editing by Anil D'Silva)

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