Entrepreneur Geoff Bainbridge has stepped down as managing director of Lark Distilling over a five-year-long extortion threat to expose a video of him smoking an ice pipe, prompting a steep 20 per cent fall in the share price of the Tasmanian distillery.

The company said in a statement that Mr Bainbridge – who co-founded the Grill’d burger chain – had tendered his immediate resignation “to manage a personal matter” the board became aware of only on Tuesday.