GGRAsia – SFC lawsuit vs LET, Summit, seeks to disqualify Andrew Lo

SFC lawsuit vs LET, Summit, seeks to disqualify Andrew Lo

Sep 30, 2024 Newsdesk Latest News, Rest of Asia, Top of the deck, World

Hong Kong’s stock market regulator the Securities and Futures Commission (SFC) said in a Friday statement that it had started legal proceedings “to seek a share repurchase order” to protect the interests of independent minority shareholders of LET Group Holdings Ltd and Summit Ascent Holdings Ltd.

The lawsuit was filed in Hong Kong’s Court of First Instance, “as a result of alleged misconduct of Mr [Andrew] Lo Kai Bong, chairman, executive director and controlling shareholder of both companies,” added the announcement.

According to the statement, the share repurchase order would require “Lo, LET and/or Summit Ascent to make an offer to purchase shares from both companies’ minority shareholders independent of Lo at a price and in a manner to be determined by the Court”.

As part of the legal proceedings, the regulator said it was also “seeking a disqualification order against Lo for his misconduct towards members of LET and Summit Ascent”.

LET Group is a casino project investor, and it controls Summit Ascent, which runs the Tigre de Cristal casino resort in Primorye, near the Russian Pacific port of Vladivostok.

LET Group and Summit Ascent became non-compliant with Hong Kong bourse rules in January, after both firms saw an exodus of directors following a first attempt to dispose of the entity that holds the gaming licence for Tigre de Cristal.

Shares of both Let Group and Summit Ascent have been under a trading suspension on the Hong Kong Stock Exchange since January 11.

In February, the Hong Kong stock market regulator said it was investigating LET Group and Summit Ascent for possible breach of its rules regarding an attempted deal to sell the Russian business.

The SFC stated that the previously-announced sale agreement – which was later terminated by the suitor – had been executed and completed without the “required approval of shareholders”.

In Friday’s statement, the SFC said the alleged misconduct of Mr Lo had “resulted in the trading suspension of the shares of LET and Summit Ascent”.

It added: “Since it is uncertain as to whether and when the shares would be able to resume trading, the share repurchase order would provide an exit for independent minority shareholders.”

The SFC said its investigation found that Mr Lo “deliberately disregarded” the applicable listing rules and the requirements under the Code on Takeovers and Mergers, as it announced “agreements to dispose of their assets in Russia in early 2024”.

Although the planned disposal of assets was terminated, the SFC alleges that Mr Lo: “Failed to, among other things, disclose all relevant material information to LET and Summit Ascent and their shareholders; apply reasonable skill, care and diligence in the performance of his duties as director of both companies; and ensure their full compliance with the Listing Rules and the Takeovers Code.”

Shareholders of LET Group approved in August a proposal to dispose of the group’s investment in the Tigre de Cristal casino resort.

LET Group is also developing – via a subsidiary – a casino resort project in the Philippine capital Manila. The Manila venue is scheduled to start operations in the first quarter of 2025.