Advertisment

A lawsuit from 2013 involving Dole Foods showed that the company had 12 million more shares of its stock than it had originally thought, exposing a weakness in the overall market system.

In 2013, David Murdock, who was the chairman, chief executive officer and biggest shareholder of Dole Food Co., took the company private for $13.50 a share. A report from Bloomberg states that shareholders felt that Murdock had purposely driven the value of the company down, so he could buy it cheaply. As a result, they sued and won.

At the time, it was believed that there were 36,793,758 shares; however, the end figure ended up being 49,164,415 shares.

Last month, the judge presiding over the Dole case, Delaware Chancery Court vice chancellor J. Travis Laster, indicated in his 17-page memorandum opinion a potential solution to the problem: blockchain technology.

Laster stated that the Blockchain Initiative of Delaware state might have facilitated Dole to handle the inconsistency in stock figures.

Blockchain to the Rescue?

Laster, an advocate for blockchain technology, was reported in October as saying that the blockchain allows for ‘a utopian vision of a share ownership system where there is only one type of owner: record owners’ when it comes to taking back the stockholding infrastructure and share voting.

According to Laster, the current system is outdated and too complex, making it difficult to determine who actually owns a share and how it’s used in corporate decision making.

Laster believes that the use of the blockchain could cut down on the cost of money and mistakes, ensuing transparency, giving peace of mind to those involved.

Such a measure with the Dole Food stock error could have prevented the mistake from occurring in the first place.

Blockchain Share Voting

The use of the blockchain has been used for voting purposes in the past.

Last October, the Abu Dhabi Securities Exchange (ADX) developed an e-voting platform based on the technology. This was to ensure that shareholders of listed companies on the exchange had the chance to fairly and accurately vote during annual general meetings.

Of course, while it’s too late to solve the issue with Dole, it could provide a solution to prevent a mistake from taking place again in the future.

With the blockchain’s use expanding as more organizations understand the impact and benefit it can provide, it is proving that it’s a viable alternative for many problems, ensuring transparency and traceability.

Featured image from Shutterstock.

Get the latest Bitcoin News on The Bitcoin News
Our Social Networks:
Facebook Instagram Pinterest Reddit Telegram Twitter Youtube