Former Donaco International Limited Managing Director and CEO Joey Lim has filed an application to the Australian Government’s Takeovers Panel in an effort to prevent the sale of a 9.35% stake in the company to Hong Kong and Singapore-based investment firm Orchard Capital Partners (OCP).
The application was confirmed by the Takeovers Panel on Monday, although it added that no decision has yet been made on whether it would continue with proceedings.
Inside Asian Gaming understands that Lim, whose employment was terminated by Donaco last month following a three-month leave of absence to deal with health and personal matters, obtained a loan from OCP but has since defaulted on repayments – leading OCP to appoint receivers over all Donaco shares previously controlled by the Lim family. Those shares amount to 27.25% of Donaco’s issued share capital.
OCP also purchased a 9.35% stake in Donaco on market in December, a sale that has prompted Lim and other family-linked shareholders to file their objection claiming breaches to Australian takeover laws.
Those shareholders are named as Gerald Tan, Total Alpha Investments Ltd, Slim Twinkle Ltd, Convent Ltd and Max Union Corporate Development Ltd.
According to Monday’s announcement by the Takeovers Panel, Lim and co “submit that the acquisition by OCP of a relevant interest in Donaco shares in excess of 9.35% in circumstances where the aggregation of the relevant interests in those shares with the relevant interests in Donaco shares of 27.25% arising as a result of the enforcement of securities, as a consequence of which OCP has a relevant interest of 37% of Donaco, is unacceptable.”
Australia’s takeover provisions for listed companies states that the acquisition of a relevant interest in voting shares is prohibited if a person’s voting power in the company increases from under 20% to over 20%, or if it increases from a starting point that is above 20% and below 90%.