The CEO of Medient Studios, Manu Kumaran, has been ousted in an apparent hostile takeover, according to a co-founder of the company.
Pankaj Kapoor, a co-founder, said he also had been removed from the company by Jake Shapiro, a member of Medient’s management team.
Medient Studios has not confirmed whether Kumaran was fired or who is assuming leadership, but scheduled an investor call-in for 4:15 p.m. Eastern Daylight Time and a media conference afterword with Shapiro.
Medient Studios Inc. has plans for a $90 million movie production and entertainment complex on a 1,500-acre site off Interstate 16 at Old River Road in Effingham County.
“In my opinion, the ouster of Mr. Kumaran is illegal,” said Kapoor in an email. “Mr. Shapiro has taken over the company and fired the senior team who founded and developed the company. I was removed from the company as well.”
Medient Studios has not confirmed the news and Kumaran has not responded to messages since sending a statement to Georgia Public Broadcasting on Wednesday evening.
The news comes as the publicly-traded company has suffered financial setbacks in trying to raise capital for its proposed megastudio.
The company’s stock, traded under ticker symbol MDNT, had recently plummeted to sub-penny level prices and was trading around .0019 Wednesday afternoon.
Al Silver, a Rincon resident and local investor in Medient, said he has tracked the company’s progress closely and represents about five other shareholders. He said share dilution seems to have been a key factor leading to the ouster of Kumaran.
A recent Securities and Exchange Commission filing by another shareholder accused the company management of trying to pay off debt through “massive issuances of common stock.”
“The notion that management has ‘no other options,’ other than massive share issuances, shows the desperate need for Medient to find candidates for its board of directors with experience in finding more appropriate, and legitimate, sources of capital,” wrote Timothy Stabosz in the SEC document.
Silver said he noticed the dilution around spring.
“It started a month and a half to two months ago and really ramped up in the last four weeks,” said Silver. “It stopped about 48 hours ago.”
Silver, who first invested in the company back in December when it was trading for .02 a share, said he made inquiries and found that the company currently has 1.934 billion shares.
“I understand why they did it because they had to raise capital to build the studioplex,” said Silver. “But once the price per share drops to that sub-penny level, it’s evident you can’t raise the capital to build that studioplex.”
Medient has encountered other setbacks as Kumaran struggled to meet deadlines set by the Effingham County Industrial Authority, who owns the property where the studio is going and has a major hand in developing it.
Medient has a 20-year lease with an option to purchase for $100 at the end of the term.
The IDA began drilling a water well last month, a project estimated at $800,000. The state of Georgia is also giving Medient $3 million in tax incentives for the complex, which is promising to deliver 1,000 jobs.
Shareholders looking to see what will happen next will have to stay tuned.
“It’s been a roller coaster ride,” said Silver.