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Hong Kong’s Securities and Futures Commission (SFC) is probing Andrew Lo, the lead investor in Manila’s next major integrated resort, over his company’s divestment of the Tigre de Cristal hotel-casino, an attempted sale that triggered mass board resignations and trading suspensions.
The SFC on Wednesday (February 14) announced it had directed the Hong Kong Stock Exchange to suspend trading in shares of LET Group Holdings Limited and its subsidiary Summit Ascent Holdings Limited over lack of shareholder approval for the Vladivostok property’s $116m sale.
Lo inherited control of the corporation linked to Macau junket operator Suncity from jailed mogul Alvin Chau under the name LET.
But Lo now faces regulatory danger in the Philippines and other Asian jurisdictions after allegedly snubbing the SEC’s communications, prompting the regulator to warn it has “serious concerns” over the corporate conduct of his empire.
The contested sale prompted the resignations of all directors from the two companies on January 15, leaving Lo alone as chairman and executive director on both boards and in violation of listing rules.
LET Group Holdings saw the resignation of three independent non-executive directors, while Summit Ascent saw the departure of CEO David Chua, a second executive director and three non-executive directors.
After any sale of Tigre de Cristal, LET and Summit Ascent “may not have a business with a sufficient level of operations and assets of sufficient value to support their operations to warrant a continued listing status of their shares”, the SFC statement said.
The SFC said shareholder approval for the sale was not sought despite its “very substantial disposal” status requiring this under stock exchange rules.
Worse, the regulator said both companies had ignored its communications.
“Both companies have failed to respond” to SFC requests that shareholder approval be secured for the Tigre de Cristal sale, it said.
“The SFC also has serious concerns about the conduct of the two companies and their management.”
LET and Summit Ascent are majority investors in the under-construction Westside City casino and hotel in the Entertainment City casino district in Metro Manila.
As of July, investors in the project, including Philippine conglomerate Alliance Global Group subsidiary Megaworld, had raised less than half of an estimated $1.1bn in construction costs.
LET and Summit Ascent subsequently moved to divest assets in Hokkaido and China’s Zhejiang Province, in addition to the Vladivostok operation.
