Just a week after acquiring a 19.25% stake in Southeast Asian casino operator Donaco International, Hong Kong hedge fund Argyle Street Management Ltd (ASM) has filed a written request for two seats on the board.
Donaco revealed on Monday that its newest investor wants two representatives of an associated firm called On Nut Road Ltd, Mr Kurkye Wong and Mr Yan Ho Leo Chan, appointed as directors of the company.
ASM has also requested that Donaco “refrains from making any decisions that cause material changes to the corporate structure, capital structure, acquisitions or divestments of Company assets, and/or management control of the company until a new Board which is reflective of the stakeholders of the company is established.”
The development comes after ASM, which is reportedly controlled by Thai hotel billionaire Chanin Donavanik, acquired a 19.25% stake in Donaco from Orchard Capital Partners (OCP) 10 days ago. The acquisition represented a significant portion of the 27.25% stake OCP had previously seized from Donaco founder Joey Lim after he defaulted on a loan repayment in November 2018.
While ASM has wasted no time in pushing for board positions, Donaco indicated a more cautious approach in an ASX filing on Monday.
“The Board and management of the Company have not previously had any contact whatsoever with representatives of On Nut Road Limited, or its associate, Argyle Street Management Limited of Hong Kong,” Donaco stated.
“Accordingly, the Board is not aware of ASM’s intentions for the Company, or its reasons for acquiring a 19.25% voting interest in the Company and seeking to appoint two representatives to the Board.”
Donaco also noted that it has a five-member board which would normally entitle ASM to a single board representative rather than two.
Ironically, an EGM is already scheduled for 18 July after another group of shareholders led by Silver Heritage Group Chairman James Spenceley filed a formal request for Joey and Ben Lim to be removed from the board.
Donaco said it could not make any commitment to ASM’s request for board representation but would initiate talks to better understand its intentions as well as the qualifications and experience of the two candidates.