The fate of beleaguered Dunedin chocolate company Ocho remains uncertain after an ‘‘extremely close’’ vote this afternoon.
At a meeting this afternoon, the Ocho board of directors decided to postpone the outcome of a resolution to place the company into voluntary liquidation for a day, while they verified the votes.
After the meeting was adjourned for 15 minutes as the about 150 shareholders present cast their votes, Ocho director Joanne Learmonth said the voting was ‘‘extremely close’’.
Within the past few weeks since the previous meeting, and even within the past few hours, a ‘‘significant number’’ of people had changed their votes and the board could not completely verify the result.
The board decided to end the meeting and said they would advise shareholders of the outcome by 5pm tomorrow.
Earlier story
Dr Jim O’Malley is encouraging shareholders to demand the Ocho's board to step down if it goes ahead with its plans to liquidate the struggling chocolate company.
The directors of Ocho had earlier warned shareholders they plan to resign if a bid to place the company into voluntary liquidation fails.
The news was sent to shareholders ahead of a meeting this afternoon to determine the fate of the embattled chocolate company.
At a meeting last month former Ocho managing director and chairman Dr O’Malley led a shareholder revolt in a bid to rescue the company.
Dr O’Malley today communicated to shareholders his assessment of Ocho’s financial viability.
He prefaced this by saying two weeks was ‘‘quite a short time’’ to develop such a document.
It had been put together under a constrained timeframe and without access to critical information.
‘‘This is primarily due to the action of the board to either not co-operate or actively inhibit the access to critical information,’’ he said.
The current board had acted in isolation and sought advice from people ‘‘who know nothing of this company’’ when reaching their conclusion.
It was ‘‘highly inappropriate’’ to liquidate a company with $2.5 million of investment capital to pay a debt that had not yet been claimed that amounted to approximately $40,000, he said.
The board had chosen to forge ahead with liquidation with the satisfaction of a small number of creditors as their only objective — the preservation of Dunedin’s chocolate industry appearing to have never been considered, and the impact on suppliers of losing the ‘‘largest craft chocolate maker in the country’’ having not been assessed, he said.
‘‘The shareholders have not been given enough time to actively consider alternatives.
‘‘Indeed, the board has actively blocked any such discussion.’’
Dr O’Malley encouraged all shareholders to demand the board step down to make way for a caretaker board, if it went ahead with its plans for liquidation.
‘‘If you are to put the company into liquidation, why would you kill the turkey in the middle of winter when in just four months it will be putting on its Christmas fat and have more for the liquidator to distribute.
‘‘Even the timing of the liquidation shows almost no knowledge of this company.’’
In a document sent to shareholders last week, obtained by the Otago Daily Times, the board of directors said they still believed the ‘‘only viable option’’ for Ocho was voluntary liquidation and reiterated they had only been involved for a short period of time.
Although they had the knowledge and skills to govern the company, ‘‘had the current directors known all that is now known, it is likely that the current directors would not have accepted the directorship positions,’’ they said.
Much of the ongoing management of the company had fallen onto the directors, at times spending up to 40 unpaid hours a week on Ocho business, they said.
‘‘This is no longer tenable or sustainable.
‘‘We also do not believe that directors working ‘in’ the business will provide the long-term profitability required.’’
At this afternoon's meeting, should the shareholders vote against the resolution to appoint a liquidator, the directors said they would ‘‘view this as a vote of no confidence and will resign from their positions’’.
If new directors were required, there would be an immediate call for nominations within 48 hours with the view of holding a meeting to elect these new directors within the next 10 working days.
Should insolvency become an inevitability within this period, the current directors would have ‘‘no choice’’ but to place the company into voluntary administration, they said.
Dr O’Malley said he had put together a ‘‘cash budget’’ focused on whether the company is viable or needed to be liquidated.
When he had requested bank statements from the board, he was supplied feeds in the wrong format and for dates he had not requested, which were of ‘‘little value except for reading’’.
Last Friday, he had went ‘‘in desperation’’ to accountants to obtain profit and loss reports and had been asked to email them a request.
On Monday, he contacted the accountants and a senior partner said the chair of the board had ‘‘instructed her not to send them to me’’.
The only budget document he had as of Monday was a profit and loss report for January 2023/24, which he had used to constuct a budget but without the level of rigour he would have preferred.
