May 30, 2019 Newsdesk Latest News, Rest of Asia, Top of the deck
There was no indication of any parallel interest in reported comments by an Australian businessman turned investor activist that he wants to see two members of Malaysia’s Lim family dynasty removed from the board of Asian casino operator Donaco International Ltd “as soon as possible”, a spokesman for Donaco has told GGRAsia.
Investor James Spenceley was quoted on Wednesday by the Australian Financial Review newspaper as saying the exit of Joey Lim Keong Yew and his brother Ben Lim Keong Hoe from the Donaco board “needs to happen for the company to get back on investor watch lists”.
Donaco said in a Wednesday filing to the Australian Securities Exchange that it would hold an extraordinary general meeting – called for by shareholders including Mr Spenceley – on July 18. The meeting will be a way to discuss the call for the Lim brothers’ removal from Donaco’s board.
Mr Spenceley and entities linked to him control circa 4.68 percent of Donaco, the majority of the stake being acquired since the beginning of 2019. Another shareholder calling for the removal of the Lim brothers - identified as Antonia Collopy – holds a 0.36-percent stake in the casino firm – putting the combined stake at 5.04 percent of Donaco’s shares.
Mr Spenceley has since May last year been the chairman of another Australia-listed Asian regional casino operator, Silver Heritage Group Ltd (SHL).
The two firms are not directly competing: Silver Heritage has its main business in a casino on Nepal’s border with India; Donaco has its main business in a venue called Star Vegas Resort and Club at Poipet, on Cambodia’s border with Thailand. But all Asian casinos are interested in vying for a finite pool of gamblers, particularly VIP ones, according to investment analysts.
“There is so much earnings potential in the business, but no one is going to touch it as is,” Mr Spenceley was further quoted as saying by the Australian newspaper, regarding Donaco.
The company has been engaged in a dispute with several Thai businessmen that formerly owned the Star Vegas Resort, and has a large loan with a Taiwan bank that it needs to service.
Ben Reichel, an executive director at Donaco, told GGRAsia in response to our enquiry about what view Donaco took of another casino company chairman calling for directors at Donaco to be removed: “I have to say… that based on the Australian Financial Review article, it seems that this action has nothing to do with Silver Heritage, or Mr Spenceley’s position as chairman of that company.”
Mr Reichel added: “His experience with Silver Heritage presumably gives him a good understanding of the industry, and enables him to see the value in Donaco’s shares. But other than that, if this action does have something to do with Silver Heritage, we are certainly not aware of it.”
Mr Joey Lim was formerly a managing director and chief executive of Donaco. He held those positions until March 19 when his employment was terminated “with immediate effect”. During his absence, Mr Ben Lim stepped in as acting CEO.
Earlier this month, Donaco announced that the Australian Takeovers Panel had found that last December’s acquisition of 9.71 percent of the company by OL Master (Singapore Fund 1) Pte Ltd (OCP) had been made in “unacceptable” circumstances. The Takeovers Panel said that when the shares were bought “the market was not aware” that OCP was already a senior secured creditor of a company controlled Mr Joey Lim, or that such business was already in December in default of his credit deal with OCP.
In early May, Silver Heritage said it was searching for “potential strategic partners or purchasers” for its Nepal operations.
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