Diamond Resorts International is hitting the news again in the USA, yesterday, 1 August 2016 they announced that they were postponing the release of the second quarter 2016 earnings results. This also led to the halting of trading on the New York Stock Exchange, which also resulted in the price of stocks falling. Apparently the postponement is due to the independent accountants having expressed the view that the figures are not correct and need to be re-evaluated.
News has also come from the States that Diamond is being investigated by several law firms representing shareholders, for possible breaches of fiduciary duty. It seems to focus on the deal between Diamond Resorts International and Apollo Global Management.
One report suggests that the Diamond Board of Directors did not market the company fairly, resulting in it being undervalued. Obviously the result of this is the shareholders have lost out, Apollo Global have paid around $30 a share, one analyst believes that this is undervalued by around $3 a share. This could be quite a substantial amount lost by many shareholders.
So could this be the start of lawsuits being initiated by the shareholders, if so what would the impact on the company be? Further reduction in share price, higher management fees for its members? Well, we shall have to wait and see. For a more in depth look into this follow the link to The Street, this will take you to all the stories and latest news.
They also point out there is evidence of severe irregularities in certain paperwork, lacking the corresponding minutes regarding ownership. They highlight that there had also been a failure to conduct a hearing from those affected and have called it a very serious oversight in procedure.
The organisation consider there are also deficiencies in the municipal licences and administrative records are inconsistent with sectoral reports and contains gaps in the reports required. Ben Magec also emphasises that these abnormalities are very serious as in his words involve “a clear benefit to a private company to the public interest”.
Apart from the serious impact of the works on the coastline, environmentalists estimate that the marine environment has been affected by these works. They blame the amount of excavations and extractions and the discharge of aggregates into the sea, impacting negatively on the ZEC Gaza marina de Mogan. This area of special protection is only 300 meters from the works in progress.
They have already reported on changes in the habitats and some of the species contained in this zone. These also include species that are listed as vulnerable and are listed in the List of Wild Species under Special Protection and Endangered Species Catalog.
The organisation has urged the prosecutor to act on its own initiative as there are serious suspicions and disproportionate actions by the administration in favour of private interests against those of the public interest.
So far over 70,000 tonnes of Saharan sand has been used in creating the beach, which is now 300 meters long and 50 meters wide. It has cost around 6million euros, with a marina of 300 berths still to be built, there are also plans for new hotels with around 7,500 bed capacity to be built. What impact this will have on the marine environment is still not known.
So this now begs the question, how have these licences and permissions been allowed to go through? We already know the Lyng´s are not that environmentally friendly, this is borne out by the regular hunting safaris they take part in. (see link at foot of the page). Could we be seeing another round of investigations surrounding malpractice in the Anfi Empire?
What effect is this also going to have on the Anfi Group, bearing in mind the numerous claims in court and the Supreme Court rulings against them? It is reported that already the law firm CLA has secured around 18.4million euro in judgements for their clients against Anfi. If this project is found to be illegal then it is another huge sum that you the owners will be having to cover with your maintenance fees. This is a story we will be watching very closely, and we will bring you the latest as it comes to light.