Founders Group International in turmoil

Founders Group International, which manages 22 Myrtle Beach golf courses, has restructured its leadership and is facing a lawsuit from the former president, Nick Dou, alleging financial misconduct against managing partner Dan Liu.

Founders Group was started by Liu, a Chinese investor, and Dou, a New Yorker in 2014. The company acquired three courses from Classic Golf Group for around $10 million in 2014, and 12 courses from National Golf Management in 2015 for $19 million. It acquired other Myrtle Beach courses during that time span to bring its total to 22.

Dou served as president of the company, and day-to-day management responsibilities were spread among key executives, including general manager Rick Taylor and chief financial officer/vice president Tommy Smothers. Taylor had previously worked for Classic Golf Group.

But in early July, Taylor, Smothers and Dou were fired. Steve Mays is now acting president.

In the lawsuit, Dou attributes his firing to his questioning of Liu’s “wrongful acts and financial irregularities” regarding the operation of FGI, according to the Sun Times in Myrtle Beach. Dou alleges Liu has misappropriated more than $1 million from Founders Group, including the purchase and upkeep of a $390,000 boat and $550,000 for a personal attorney.

Liu is under investigation in China for possible financial fraud through his involvement in a lending business, Yiqian Funding, which is the parent company of Founders Group. Articles in China claim that Yiqian Funding used a Ponzi Scheme, shell companies and internet fraud.

Dou told the Sun News in Myrtle Beach in April that Founders Group’s purchases were made with funding that was properly attained and approved by the Chinese government for investment abroad. Dou has said he owns 10 percent of Founders Group.

But Bowen Press, an online news magazine in China, has reported that as much as $1.5 billion may be involved in the alleged fraud, and that the company is accused of defrauding investors by transferring money to a U.S. branch company that purchased golf courses, hotels, mansions and yachts and then re-sold the purchases back to Yiqian investors at inflated prices.


Meanwhile, Founders Group has restructured its management by creating six regional positions — with three regional operations managers reporting to Mays, and three superintendents reporting to Max Morgan, FGI's vice president of agronomy.

"We have a solid and experienced team already and our reorganization will enable them to function more efficiently as they marshal the resources of the staff assigned to them," Mays said. "Our regional approach will increase the efficiency of our golf operations and ensure that the company continues to deliver exceptional golf experiences for our customers."

The company also recently appointed Casey Cook to director of retail for all courses. Cook will manage golf shop inventories, create vendor programs for the company, run promotions, and strive to exceed projected retail sale revenues. 

 

 

 

 

 

 

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