Donaco International Ltd will propose a change of corporate name at the company’s upcoming Annual General Meeting in November – a move it describes as “a public statement that we are leaving the past behind.”
Coming in the wake of a turbulent year for the ASX-listed firm, Donaco’s announcement on Monday of the date and venue of its AGM included a Message from the Board in which it suggests changing the name of the company to “Pan Asian Leisure Ltd.”
“Over the past 12 months, the Company has been substantially transformed, with a new shareholder base, new Board and new Chief Executive Officer,” Monday’s filing states.
“The resolutions put forward by the Board at this AGM are designed to seek endorsement by shareholders of these changes.”
More than just a name change however, this AGM looms as a decisive step forward for the company given that a small group linked with Donaco founders Joey Lim and Ben Lim – who were voted off the Board in July – hope to use it as a last ditch attempt to regain control.
Leading that group is Gerald Tan, a current Donaco shareholder, former Board member and close friend of the Lim brothers who was appointed by Joey Lim as Interim General Manager at Star Vegas in Cambodia in August 2017 and COO in February 2018.
Tan, who was one of two shareholders to call for the removal of the entire Donaco Board earlier this month, is potentially up for a return to the board in the unlikely scenario that more than 25% of votes in relation to a Remuneration Report at the upcoming AGM are cast as “against”. In such an instance, the entire Donaco board faces possible removal with the group led by Tan to take over instead.
However, Donaco noted in Monday’s filing that the July decision by shareholders to remove the Lim brothers had received 508 million votes for and just 8 million against, of which 7 million were controlled by Tan.
It also placed much of the blame for the challenges it has faced in recent times – primarily in regards to ongoing legal issues with the former Thai vendors of Star Vegas – at the feet of the Star Vegas management team appointed under the watch of Joey and Ben Lim.
“The financial performance of the Company during the past two financial years has been unacceptable,” Donaco stated in its Message from the Board.
“Although the Company has always remained profitable and cash flow positive during this period, revenues and earnings have declined, and significant statutory losses have been recorded, due to the non-cash impairment charges on the Star Vegas business.
“The Board has taken strong action to address this decline, in two key areas: by removing and replacing the management team responsible for the operational performance during this period; and by taking legal action to protect and preserve shareholder rights.”
Donaco also pointed to its own internal transformation, noting that “the Board has been substantially transformed in the past 12 months, and for the first time, there are three independent Directors.
“The management team has also been transformed, with Mr Paul Arbuckle as the new CEO,” it said. “The new team has already delivered significantly improved financial results at both of the Company’s casino properties in the September 2019 quarter.
“It is now time to leave the past behind and allow the Company to move forward with the current, stable board, which is not subject to challenge, and can focus on creating value for shareholders.”