The situation which started with the Digicel Caribbean Executive AV Services Ltd shareholder being booted out of a board meeting has now reached a level where some shareholders find themselves stripped of their shares.

Digicel Caribbean Executive AV Services Limited (DCEAVS) invested $7.8 million in the Mulifanua resort, equivalent to 15.01 per cent of the resort's shares second only to Samoa National Provident Fund (SNPF), which holds 54.07 per cent of the resort's shares.

A recent search on the Ministry of Commerce Industry and Labour (MCIL) company's registry shows that DCEAVS and another major shareholder, American businessman David Katzin, were no longer listed as shareholders. Mr Katzin holds 8.6 per cent of the property's shares and is the third largest shareholder. 

The company registry notes five directors namely; Leota Kosimiki Latu, Panoa Moala Tavita, Sulamanaia Montini Ott, Lealiiee Rudi Ott and Leiataua Isikuki Punivalu.

There were initially 17 shareholders at the Mulifanua resort and only 15 of those shareholders are listed on the registry. Shares believed to be those of DCEAVSL were cancelled and replaced by "Mulifanua Beach Resort Samoa Limited" on 23 December 2024 and the registered office address is the SNPF office.

The records also show that "other shareholder" which is believed to belong to Mr Katzin notes "other shareholders to be determined by the Board."

The Samoa Airport Authority holds 4.9 per cent of the resort’s shares—alongside the SNPF’s 55 per cent stake, the Parliamentary Pension Scheme’s 1.3 per cent, and CSL’s 0.2 per cent—the combined public ownership far outweighs all private shareholders. This means that the affairs of SMBR are of public concern.

The whole situation started with the September board meeting when DCEAV representative John Flannery was booted out of a meeting for asking questions about the company’s financials and audited reports. This was followed by the board attempting to ban Flannery from the meeting. This was met with a court order telling the board that they could not do this.

Now we see that the board has moved to replace shareholders. This is a very strange move and there has been no clear justification given by the board and the chair. There is a further unwillingness to answer questions from the media. The public interest in SMBR outweighs private interest and the board needs to be accountable for their action.

Shareholder agreements include provisions for removing a shareholder, such as in cases of breach of the agreement or deadlock. Was there such a breach?

The company or other shareholders may agree to buy out the shares of a shareholder who is to be removed. A buyout, but it seems that has not happened. It seems that a coup has happened where two of the biggest shareholders aside from SNPF have been removed.

In some cases, a shareholder may be forced to sell their shares through a court order or under specific legal provisions. No court order has been sighted or given to the two shareholders who now find themselves delisted as shares.

A shareholder is also removed through a voting process, and then the shareholder is compensated accordingly upon termination. This would mean the SMBR would have to pay out close to $12 million to both shareholders.

This is also behaviour that raises red flags on how a resort with public interest through government and SNPF shares is being managed. Such behaviour also undermines foreign investment and future investors will not be keen on investing in such ventures if such antics are to be expected.

The resort faces a crippling debt of $36,759,456. There was a proposed move for the SNPF to potentially clear the resort’s $37 million debt. That is money belonging to the people. The deal will leave SNPF with an 88.8 per cent stake in the resort, which is essentially broke, having incurred repeated losses over the past decade.

The people need to know if the board is working in the best interest of the resort and by doing so, in the best interest of the people.