Just when you thought everything was settling down at Dolphin Cove… BAM, here comes a power struggle.
Before we get into the drama, some key information to remember is that Dolphin Cove is owned by a Barbados-based company called World of Dolphins. World of Dolphins is in turn owned by Dolphin Discovery in Mexico.
So on April 2, Dolphin Cove released a statement to the Jamaica Stock Exchange that based on legal advice, Stafford Burrowes, who is the founder of Dolphin Cove, is still the company’s Chairman. Ok, a little random but good to know.
But then in a letter dated April 8, World of Dolphins, which owns 80% of Dolphin Cove, sent a scathing letter to the JSE demanding an investigation into several members of Dolphin Cove’s board.
According to World of Dolphins’ letter, Stafford Burrowes was fired in December and several board members “pretended to reinstate him.” The letter says he was given notice of termination on December 2, in full compliance with the company’s laws.
The letter alleges that he was disrespectful to employees, yelling and using his position as Chairman to intimidate them.
According to World of Dolphins, the company secretary was instructed to notify the JSE of Burrowes’ termination. But that never happened.
And we checked. Dolphin Cove submitted its unaudited Q3 results on November 14. The next notice given was the statement about the issues with its ultimate parent company, Dolphin Discovery, on February 25. Remember Dolphin Discovery has filed for Mexico’s form of bankruptcy.
There was even some talk that Dolphin Cove could be sold to cover some of Dolphin Discovery’s debts. That’s when Burrowes came out and said if they want to sell, he can buy it back. That statement is what steadied Dolphin Cove’s stock, because it had sunk from 19 dollars and 60 cents to as low as 12 dollars after the bankruptcy news.
But now, World of Dolphins says Burrowes was fired in December, several months before the bankruptcy news. And as a listed company, this is most definitely information that should’ve been shared with the public.
On the flip side, Dolphin Cove says Barrowes is still the chairman. Just as we were recording, Dolphin Cove issued a follow up statement saying that the notice of Burrowes’ termination was written on an unauthorised letterhead, which makes it ineffective under the company’s articles of incorporation.
World of Dolphins is demanding an investigation into the actions of the board members who they say instructed the company secretary not to report Burrowes' termination to the JSE. And they also want the secretary to be investigated for not carrying out her duties.
And that’s the bottom line.
So what do you think about this news? Does all this drama make you less confident in Dolphin Cove’s stock? Or would you take advantage of the turmoil and buy the stock? Let me know in the comments.
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