Donaco eyes stake freeze for shareholders disputing board

Nov 05, 2019 Newsdesk Latest News, Rest of Asia, Top of the deck  

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Asian casino operator Donaco International Ltd is asking the Australian Government Takeovers Panel to restrain two minority shareholders of the company from “acquiring, transferring or disposing” of any shares in the group.

The two people – Gerald Tan Eng Hoe and Patrick Tan Teck Lee – have been asking since August for a Donaco shareholders’ meeting in order to remove all the current directors.

Although the company eventually considered the request “invalid”, Donaco said it would still present the removal proposal for a vote in its next annual general meeting on November 29. That was following a request of its 19.25-percent shareholder One Nut Road Ltd, said to be aimed at clearing the air over the matter. On Nut Road however made it clear it supported the current board.

In a filing on Monday, Donaco made available a letter from the Takeovers Panel regarding its request to freeze the stake of Mr Gerald Tan and Mr Patrick Tan. The document said Donaco considered that the two men and “certain” – unnamed – “other persons” were “associated by reason of entering into a scheme for the purpose of controlling or influencing the composition of the Donaco board and the conduct of Donaco’s affairs.” The Australia-listed firm said that was in contravention of rules in that country, according to the Takeovers Panel’s letter.

A previous filing from Donaco said “Mr Gerald Tan is a close associate and business associate” of former company chief executive Joey Lim Keong Yew. Mr Joey Lim was also until recently a substantial shareholder of Donaco.

“Donaco seeks interim orders including restraining [Mr Gerald Tan and Mr Patrick Tan] and their associates from acquiring, transferring or disposing of any Donaco shares,” the Takeovers Panel’s document added. “Donaco seeks final orders including vesting the Donaco shares beneficially held by the [Mr Gerald Tan and Mr Patrick Tan] and their associates in the Australian Securities and Investments Commission for sale.”

The Takeovers Panel stated that a sitting panel for Donaco’s case had “not been appointed at this stage and no decision has been made whether to conduct proceedings.”

The body added it would make no comment on the merits of Donaco’s application.

Donaco – which runs a casino hotel in Vietnam and one in Poipet, Cambodia – has been roiled in recent times by a number of issues. They have included its long-running dispute with the Thai people that sold the group the rights to run the Star Vegas Resort and Club in Poipet, and the extended leave of absence – described as for health reasons – of then CEO Mr Joey Lim.

In March Mr Joey Lim was sacked as CEO, and in July he and his brother Ben Lim Keong Hoe were dropped as Donaco directors.

Last month Paul Arbuckle, the recently-appointed group CEO said in comments prefacing Donaco’s report for financial year ending June 30, that the firm had made “operational improvements” in the three months ending September 30 this year, that were already resulting in “improved financial performance”.

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