The Australian Stock Exchange (ASX) last week suspended trading of shares in Donaco International Inc. after a general meeting in which three board members got the boot: Chairman Stuart McGregor and non-executive directors David Green and Yugo Kinoshita. After the board uprising, CEO Paul Arbuckle quit, as well.
The ousted members were preceded on a voluntary basis by general counsel and company secretary Ben Reichel, who announced his decision to step down from the board on November 29; he will stay on in those roles temporarily.
According to Inside Asian Gaming, the annual general meeting held Monday, December 2 marked a “decisive day for the future direction of Donaco” following a turbulent year in which company founder Joey Lim also was ousted.
The departures means Donaco now has just three directors, of which two, Leo Chan and Kurkye Wong, represent On Nut Road Ltd., the Asian-based investment firm that recently acquired a 19.25 percent stake in the company. The third director, Hong Kong-based Australian Roderick John Sutton, was newly appointed to the board last week.
Sutton was described in the filing as having more than 25 years of experience in business advisory and management. He is a special advisor to the Asia Pacific region for FTI Consulting, a professional services and consulting business listed on the New York Stock Exchange, according to the statement.
On Nut Road originally requested a shareholder’s meeting in October over a call by two individual shareholders to replace the entire Donaco board. Those shareholders, Gerald Nicholas Tan Eng Hoe and Patrick Tan Teck Lee, also put themselves forward as replacements for the ousted board but failed to win enough votes.
In calling for the meeting, On Nut Road stated at the time that it did not support the resolutions stated by Gerald and Patrick Tan and had no agreement or understanding in place with them.
“It is our view that in order to settle the matters addressed … and allow the company to move forward with the current, stable board, which is not subject to challenge, we believe it is in the interests of the company to put these resolutions to members,” it said.
On Nut Road’s two Donaco representatives, Chan and Wong, were only appointed in mid-August but are now the longest serving members of the current three-man board, IAG reported. Donaco says it’s “seeking to recruit two more independent non-executive directors based in Australia in the near future. To this end, the board is currently in advanced discussions with a number of quality candidates, including candidates with experience in casino gaming in Asia.”
Shareholders voted down a proposal to change the company name to Pan Asian Leisure Ltd.
In a statement, Donaco non-executive director Kurkye Wong of Argyle Street Management Ltd. which recently purchased a 19.25 percent stake in the company, said Reichel was invited to remain on the board “As the company’s largest shareholder, we consider that Ben Reichel has done an excellent job in protecting the interests of Donaco and its shareholders over the past seven years,” said Wong. “We supported Ben’s re-election to the board … however we understand and respect his decision to step down.
“We requested that he remain as an executive of the company for a transition period due to his valuable skills and experience, and we are glad that he has agreed to do so.”
Reichel has helped steer Donaco through a troublesome period that included ongoing litigation in Australia, Singapore and Cambodia with the Thai vendors of the company’s Star Vegas property and the removal by shareholder vote of company founder Joey Lim, whose shares were seized earlier in the year when he defaulted on a personal loan.
Arbuckle has only been with Donaco since June and the board recognized his contribution.
“Paul Arbuckle has made a significant contribution to improving the operations of Donaco since joining as CEO in June 2019,” the board said in a statement.
“We respect his decision to tender his resignation at this time. The board will now commence an executive search process to replace Paul as CEO, and we appreciate his willingness to continue to assist the company during this transition period.”
