David Baazov, the former CEO of Amaya Inc. (now the Stars Group) is being sued by a Dubai investor who says Baazov fraudulently used his name to gain support for his 2016 Amaya takeover bid.
According to a report in the Canadian La Presse, KBC Aldini Capital president Kalani Lal filed the lawsuit in Dubai in January. It accuses Baazov and his longtime financial services partner Canaccord Genuity of fraudulently using Lal’s name and signature to gain support for the takeover bid.
Baazov has offered C$24 per share for the company, but the deal was not approved, partly due to controversy over the named financers of the bid. Baazov filed papers with the US Securities Exchange Commission saying that he’d lined up $3.65 billion in financial commitments from four investment firms, including KBC Aldini Capital. However, Lal quickly went on record saying “neither KBC Aldini nor any of its related entities are involved in this transaction.” Baazov then admitted that KBC Aldini was not involved and the deal quickly fell through.
The lawsuit was discovered by Quebec securities regulator Autorité des marchés financiers, which is prosecuting the insider trading charges against Baazov.
According to a report at CalvinAyre.com, an AMF investigator contacted Lal, who said he had never heard of Baazov or Amaya prior to the SEC filings. The AMF also concluded that “KBC’s clientele is predominantly Muslim, meaning that KBC will never invest in a gaming business, otherwise it will lose all its customers.” Lal reportedly had to respond to numerous concerns about the deal from the firm’s investors.
Also, La Presse reported that the AMF’s investigation into the 2014, $4.9 billion PokerStars purchase has disclosed that Baazov allegedly agreed to hold the majority of his Amaya shares on behalf of his brother Ofer “Josh” Baazov and his longtime online gambling business partner Craig Levett, essentially masking the company’s true ownership.
The agreement gave the two men access to Amaya’s books and established that no major decision could be made without their approval, the paper reported. The AMF also claims to have emails in which Ofer is referred to as Amaya’s real owner, the report said. Both Josh Baazov and Levett are named as beneficiaries of the alleged insider trading scheme on the PokerStars purchase.
A spokesman for Baazov denied the allegations, the paper reported. Baazov’s criminal trial is scheduled for November.