GGRAsia – Third party now with 19pct Donaco stake wants board seats

Third party now with 19pct Donaco stake wants board seats

Jul 01, 2019 Newsdesk Latest News, Top of the deck, World

The owner of a 19.25-percent stake in Asian boutique casino operator Donaco International Ltd is now asking for two seats on the Donaco board. The stake had been held by a creditor to the group’s former chief executive Joey Lim Keong Yew.

That is according to a Monday filing by the group, made to the Australian Securities Exchange.

Donaco operates a casino hotel in Vietnam near that country’s border with China, and another in Poipet, Cambodia, near that nation’s frontier with Thailand. In the case of the latter venue, the group has been in a long-running dispute with the former owners that had – for a protracted period – a negative impact on group’s gaming earnings from that site.

Donaco’s Monday filing said the 19.25-percent stake in the company had been transferred to the third party – identified as On Nut Road Ltd – on June 20.

The casino operator told the bourse that Donaco’s board and management “have not previously had any contact whatsoever with representatives of On Nut Road Ltd, or its associate, Argyle Street Management Ltd of Hong Kong”.

Donaco added: “Accordingly, the board is not aware of Argyle Street Management’s intentions for the company, or its reasons for acquiring a 19.25 percent voting interest in the company and seeking to appoint two representatives to the board.”

The casino firm stated that the size of stake involved would “under normal circumstances” entitle the holder to only one seat on the Donaco board, and that the company would prefer its board to be composed of a majority of independent directors.

Accordingly Donaco’s current board was “not in a position to provide any commitment to this effect, and will continue to act in the best interests of all shareholders, and of the company as a whole,” stated the filing.

The filing quoted a June 28 letter from Veritas Advisory Pty Ltd, a firm that has been acting as receiver of the 19.25 percent stake. The letter called on the Donaco board to appoint Kurkye Wong and Leo Yan Ho Chan – described as “named associates” of On Nut Road Ltd – as Donaco directors, or to call a shareholders meeting to do so.

The letter – included with Donaco’s Monday filing – noted that an extraordinary general meeting had already been called by Donaco shareholders for July 18, and that a resolution had been tabled for the meeting that sought to remove from the Donaco board Mr Joey Lim and his brother Ben Lim Keong Hoe. Both are members of the Malaysian Lim dynasty that founded the Genting casino group.

Donaco stated in its Monday filing: “The board will now engage with Argyle Street Management and with the receivers to understand Argyle Street Management’s intentions, and to review the qualifications and experience of the two named candidates for appointment as directors.”

The casino firm added: “Finally, the board states that it will do everything in its power to protect the interests of minority shareholders, and to ensure that control of the company does not pass unless all legal requirements are satisfied and an appropriate control premium is paid.”