Three Thai shareholders in casino operator Donaco International Ltd have begun arbitration proceedings in Cambodia to try to settle in their favour a dispute with the company over the lease on the land occupied by casino venue Star Vegas Resort and Club (pictured).
The three sold Star Vegas to Donaco in 2015. A Cambodian court has already ruled against the vendors regarding the land lease.
Donaco announced the start of the Cambodian arbitration to the Australian Securities Exchange on Friday. The statement said the company was confident about its position, given that a Cambodian court had acted to stop the shareholders from ending the lease.
The company previously told the stock market that the Banteay Meanchey Court of First Instance had granted an injunction preventing the landlord, Lee Hoe Property Co Ltd, from ending the 50-year lease. Donaco said the landlord, a Cambodian company, was owned by the Thai shareholders who are Cambodian passport holders. It identified the shareholders as Somboon Sukcharoenkraisri alias Lee Bug Leng, Techatut Sukcharoenkraisri alias Lee Bug Huy and Bhuvasith Chaiarunrojh alias Lee Bug Tong.
Donaco said the landlord had threatened to end the lease on what the company called “contrived and spurious grounds”. The company said it had obtained a court injunction preventing the three shareholders from illegally competing with Star Vegas in Poipet, a city near the Thai border. The shareholders have indicated that they intend to appeal against that injunction.
Donaco said previously that it was claiming US$190 million in damages from the three shareholders in the case it has brought before arbitrators in Singapore.
On June 1, Donaco told the stock market that a court in the Australian state of New South Wales had extended until November 2 an order preventing the three shareholders from selling their shares until the Singapore arbitration proceedings were complete.
Donaco says the three own about 148 million shares or about 17.9 percent of the issued capital. They sold the Star Vegas casino resort to Donaco in 2015 for US$360 million. Donaco alleges the three shareholders continue to run a neighbouring business called Star Paradise that competes against the Star Vegas, contravening an agreement not to compete.
Donaco makes most of its gaming revenue by exploiting the patchwork approach to casino regulation in Southeast Asia. Star Vegas draws many patrons from Thailand, where casinos are banned. The company’s Aristo International Hotel in Lao Cai in Vietnam, near the Chinese border, draws many mainland Chinese players. Casino gambling is illegal in China except in Macau.
Jun 29, 2022Only two of Macau’s 18 satellite casinos – the Rio Casino and the President Casino – have closed amid changes to the city’s regulatory system for such properties, and against...
Jun 29, 2022
Jun 29, 2022
"There is still no clarity about when border easing for Macau will occur. In the end these changes are needed to see a rebound for Macau business"
Vitaly Umansky, Louis Li and Shirley Yang
Analysts at brokerage Sanford C. Bernstein