Shock as longstanding Donaco board member steps aside
Donaco continues to undergo changes behind the scenes, with Ben Reichel stepping down as a board member just hours before the company’s annual general meeting.
Calvin Ayre reports the resignation of Mr Reichel ends a seven-year term on the board of the gambling giant.
Prior to the annual meeting, which was held in Sydney on November 29, Mr Reichel announced that he would not be seeking re-election.
Mr Reichel has also been serving as the General Counsel and Company Secretary of Donaco, and it is reported that he will remain in those positions, at least temporarily.
In a statement, non-executive director Kurkye Wong said: “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.”
“We supported Ben’s re-election to the Board…however, we understand and respect his decision to step down from the Board at the conclusion of [last Friday’s] meeting.”
As part of the statement, Mr Wong explained that they have asked Mr Reichel to stay on as an executive with the company during a transition period.
The director explained that “his valuable skills and experience” would be invaluable during the transition period.
The move is a surprising one, as Mr Wong explained that a proxy vote which was cast on behalf of investors showed that they were “strongly in favour” of him remaining on the board.
Mr Reichel’s departure from the board of Donaco took effect immediately.
His departure comes at a most interesting time for Donaco.
The company reported in October that they would be changing their name to Pan Asian leisure, a move that the company described as “a new beginning for the company.”
Since the beginning of 2019, they have named a new chief executive officer and been involved in a protracted legal battle with vendors at their flagship Star Vegas Casino in Cambodia.
That battle was recently resolved when an appeals court in the Cambodian capital rejected the vendors attempt to seize assets from the casino.
Despite the high-profile entanglements, the company is showing strong growth.
In a statement by Donaco chief executive officer Paul Arbuckle, he recently explained the company’s strong showing in October, featuring a four-month total for earnings before interest, taxation, depreciation and amortization of $4.2 million.
Mr Arbuckle described these numbers as “well ahead” of the total revenue for the same period in 2018.
A win for Donaco in Cambodia
In November, Donaco revealed that it had won the final stage of a court process in Cambodia linked to a long-running dispute over its Cambodian operation.
The dispute in question was with a Thai party that sold it the rights to run the Star Vegas Resort and Club in Poipet, a town on the Cambodia-Thailand border.
The casino firm has also been pursuing legal remedies against the Thai party via processes in Singapore and Australia.
Donaco claimed in its latest filing on the matter – made to the Australian Securities Exchange – that the Thai vendor of the Star Vegas business had “conducted a campaign of legal harassment against the company” in Cambodia.
Donaco stated: “In particular, the Thai vendor has made two attempts in lower courts to seize various assets of the Star Vegas business, purportedly as security for the vendor’s claim for the financial year 2017 management fee.”
The effort involved attempts to freeze the Cambodian bank account of the Star Vegas business said Donaco.
It added the Thai vendor’s “attempts to seize assets were rejected by the lower courts” in Cambodia on July 6, 2018 and January 10, 2019.
“The Thai vendors appealed the second ruling to the Appeal Court in Phnom Penh. The Appeal Court has now ruled in Donaco’s favour, and once again rejected the vendor’s claims. There is no further appeal in this matter,” the firm said in its Wednesday filing.
The Appeal Court was the same court that would rule “in due course” on the company’s appeal against what Donaco termed the “Cambodian lease arbitration decision.”