The board controversy that has enveloped Seafarms Group (ASX: SFG) could be peeling away following today’s promotion of its Project Sea Dragon (PSD) chief project officer Rod Dyer as CEO, alongside confirmation of the departure of outgoing CFO and director Ian Brannan.
The latest update in the leadership saga comes after Seafarms’ largest shareholder, long-time investor and recently appointed chairman Ian Trahar prised back control of the business after the decision of former CEO and executive chairman Mick McMahon to step down from both roles earlier this month.
Trahar had set the wheels in motion in April after calling for the removal of McMahon just five months after he was brought in as CEO to oversee Seafarm's ambitious $1.87 billion aquaculture plan PSD - a plan to develop 10,000 hectares of ponds in Legune Station, NT to produce 180,000 metric tonnes of black tiger shrimp.
A former Inghams Group (ASX: ING) colleague of McMahon's, Brannan was appointed at the same time as the former CEO last November, with both having instigated a review of the entire PSD project after being handed the reigns over concerns with the feasibility of the finalised debt and equity funding arrangements.
Work on the project was suspended while awaiting the publication of the review.
After five years of funding, Seafarms had raised $110 million for the project by mid-2020, with the NT Government committing to spend an additional $56 million on infrastructure in the area.
Seafarms raised a further $92.5 million before construction began in June 2021 - $20 million of which came from Trahar - but this fell significantly short of raising enough to cover the costs of the first phase of construction.
The report, released on 31 March 2022, recognised the failure of Seafarms to raise the sufficient capital needed for the next phase of PSD development, concluding the project would "not generate acceptable financial returns".
The report also found that the business model involved "unacceptable risks" such as biosecurity, environmental conditions, remoteness, and grow-out ponds that were “unproven in Australia”.
Brannan, who steps down from his roles as CFO, director and company secretary with immediate effect, will be replaced by Ian Leijer as CFO. Leijer has been a commercial director at Seafarms since 2012.
Former CFO and board member Harley Whitcombe, who made way for Brannan last November, has been reappointed to the board and will also fulfil the company secretary role.
Dyer, who was appointed project director of PSD in October 2017, is set to more than double his current salary to $750,000 as he takes control of the business – which also owns Queensland-based Crystal Bay Prawns.
In addition, Terutaka Kuraishi replaces Naoto Sato as an alternate director for Hisami Sakai - Nippon Suisan Kaisha’s (Nissui) representative on the board. Japan-based Nissui invested $24.99 million in Seafarms in July 2018.
Shares in Seafarms Group (ASX: SFG) rose 6.25 per cent as at 12.24 AEST on the back of the announcement.
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