Amaya chairman David Baazov will take an unpaid leave of absence as he answers insider trading charges in Canada stemming from the company’s 2014 acquisition of PokerStar’s parent company.
The voluntary indefinite paid leave of absence begins March 28 and comes after the charges were announced by Quebec’s securities regulatory authority. Amaya Inc. is based in Montreal.
“Baazov is taking this leave voluntarily to focus on preparing an offer to acquire Amaya and to avoid a distraction for the company while he responds to certain allegations made against him by the Autorité des marchés financiers (AMF), the securities regulatory authority in Quebec,” Amaya said in a press release.
Baazov will remain on Amaya’s board of directors during the leave. The board has appointed Divyesh (Dave) Gadhia as interim chairman, and Rafi Ashkenazi as interim CEO according to the release.
Last month, Baazov and two associates were charged with insider trading over the company’s acquisition of the Rational Group, parent company to PokerStars and a surge in the company’s stock value just before the purchase.
Baazov was charged was charged with “aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of the securities of Amaya” and “communicating privileged information.”
Baazov quickly denied the charges.
“As always, I continue to be dedicated to doing the right thing for Amaya and all its stakeholders,” Baazov said in the release on his leave of absence. “I believe that stepping down in the short term will help to avoid distraction for the company and its management while I vigorously contest all allegations made against me and pursue my bid to acquire the company.”
Baazov has entered into negotiations to acquire the company and take the online gaming giant private. Amaya has appointed a special committee to explore any potential offers for the company from Baazov—who has not made a formal offer, but initial reports put estimates at $2.8 billion—or any interested third parties, the company said. However, the committee has not determined a sale is in the best interest of the company, Amaya said in its press statement.
The board has also charged the committee to investigate the insider trading charges, but has previously said it stands behind Baazov and expects the charges to be proven false.
“While none of these allegations have been proven, the board takes them seriously and has expanded the mandate of the special committee to investigate these additional matters,” the company said.
Gadhia—who was named interim chairman—has been an Amaya director since 2010 and is the lead independent director. He’s also chairman of Amaya’s special committee.
Meanwhile, a review of documents in the case by Canada’s Business News Network found Quebec regulators allege friends and associates of Baazov made nearly $1.5 million in profits from insider information they received about Amaya acquisitions, including the $4.9 billion PokerStars deal.
Documents released by L’Autorite des marches financiers accuse Baazov of being “the main source” of privileged information.”
Baazov has been charged with five counts, including influencing or attempting to influence the market price of the securities of Amaya. Two other people and three companies face 18 additional charges stemming from the AMF investigation, BNN reported.
