A meeting between between property owners and Oceans Group International (OGI) management held on September 15, 2023. During the meeting OGI admitted that it diverted rental income funds which the owner of Jungle Lodge 1 was contractually entitled to for the purpose of paying for a fuel delivery. OGI and the owners are supposed to split the rental revenue. Over the course of the last year Jungle Lodge 1 was rented to the public and the owner’s share of those revenues was approximately $10,0000. OGI had not yet remitted those funds to the owner.
Electrical power at the Red Frog Beach resort is produced by 3 diesel generators because no power connection to the mainland has ever been established. A fuel delivery was made and the cost of the fuel was approximately $50,000. At current prices for diesel fuel that would equate to about 10,000 gallons. OGI has been chronically short of cash and could not afford to pay for the fuel. In order to make ends meet the company simply diverted the funds which were owed, but not yet paid, to the owner of Jungle Lodge 1 to help pay for the fuel. This admission was made in a presentation to the owners by Steve Bolton, the senior partner in the holding company which owns 100% of OGI stock. Mr. Bolton is believed to own more than 40% of the stock and to have invested in excess of $15 million in the Red Frog Beach project. He owns the largest individual stake in the company.
The chronic shortage of cash reveals that Mr. Bolton is either unable or unwilling to make further investments in Red Frog Beach by injecting more cash into OGI.
The diversion of the $10,000 owed to the owner of Jungle Lodge 1 was done without the prior knowledge or consent of the owner. In fact, the owner of Jungle Lodge 1 learned of the diversion when Bolton spoke from the podium at the owners meeting. Bolton also admitted that this is a practice the company has engaged in multiple times and continues to do so. Rather than pay property owners the funds due to them for the rental of their properties OGI uses that money to fund it’s operations. Apparently the company offers owners who are the victims of this practice “credits” for future resort services. Understandably upset, the owner of Jungle Lodge 1 subsequently withdrew it from the rental pool.
Of the three generators at Red Frog, one is reportedly entirely out of service and another is on the verge of failure. OGI does not have the funds to repair or overhaul the generators. At the owners meeting OGI acknowledged that the infrastructure at the resort is on the verge of failure and the resort cannot be operated at full capacity during the upcoming high season for tourism.
RedFrogTruth reached out by mail to Haley and Bolton requesting comment prior to publication of this story. They did not respond.
OPINION: Diverting funds owed to a property owner without the prior knowledge and consent of that owner is a brazen display of dishonesty. It turns property owners into economic hostages of the company. Sadly, this is a pattern of behavior that OGI management has displayed repeatedly over many years. Rather than being honest about the financial condition of OGI and seeking permission in advance from parties that are owed money by OGI, the company simply diverts the money without permission, probably in breach of contract, and then informs them later (if at all) of their actions. There is timeless adage that honesty is the best policy. This can be difficult at times but it remains the truth. Sadly, Joe Haley and Steve Bolton appear to have never learned this principle. Haley and Bolton appear to be consumed by short-term thinking. The withdrawal of Jungle Lodge 1 from the rental pool means that it will no longer generate any cash for OGI in the future. So in order to deal with a short-term problem Haley and Bolton have created an even larger long term problem. We believe that over time the cumulative effect of dishonesty and short-term thinking will cause greater problems for the resort, perhaps even bankruptcy. The lack of integrity of Haley and Bolton may already have been a major factor in their failure to secure additional investment capital. We believe that the solution to the resort’s long-term problems can and should only be achieved by Haley and Bolton first displaying a commitment to honesty and integrity.
