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HK regulator warns LET Group, Summit Ascent delisting over Russian asset sale

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Hong Kong stock regulator warns it may delist LET Group and Summit Ascent over concerns about the sale of its Russian assets, namely Tigre de Cristal.

Andrew Lo, LET Group Holdings
Andrew Lo, Chairman, LET Group Holdings

The Securities and Futures Commission (SFC) has taken decisive action against Summit Ascent and its parent LET Group by suspending trading in their shares under the Stock Market Listing Rules, effective from 9am on February 14th.

According to the latest notice, this move comes in response to concerns raised by the SFC regarding a significant disposal of a major asset held by LET Group and Summit Ascent. Specifically, the sale of assets in Russia – namely its stake in Tigre de Cristal, amounting to $116 million, has drawn scrutiny from regulatory authorities.

This transaction, which caught the attention of the SFC on January 29th, involves a major asset that Summit Ascent indirectly owned through a 77.5 percent owned subsidiary.

LET Group was formerly known as Suncity Group, which was headed by jailed Macau gambling kingpin Alvin Chau. Following a change in control of LET Group in May 2022, any significant disposal is restricted for 36 months from the date of the change in control. 

However, this restriction can be waived if the remaining group post-change in control meets the criteria outlined in the Rules.

The SFC has observed that following the completion of this substantial disposal, LET Group and Summit Ascent need to possess a business with a sufficient level of operations and assets of adequate value to sustain their operations, thus potentially jeopardizing their continued listing status under the Listing Rules. Consequently, both companies may no longer be deemed suitable for listing.

Furthermore, the SFC has noted that the significant disposal did not adhere to the requirements stipulated in the Code on Takeovers and Mergers, particularly regarding consultation with the Takeovers Executive and obtaining shareholders’ approval. Specifically, the sale and purchase agreement pertaining to the disposal were executed without making completion contingent upon securing the necessary shareholder approval.

In response to these concerns, the SFC has requested LET Group and Summit Ascent to address the issue by assuring that the completion of the Very Substantial Disposal (VSD) is subject to shareholders’ approval and fully compliant with relevant regulations. However, both companies have failed to respond to the SFC’s requests, raising serious doubts about their conduct and management.

Given these circumstances, the SFC deems it necessary to suspend trading in the shares of LET Group and Summit Ascent to maintain fairness and orderliness in the market and safeguard the interests of investors. The SFC’s investigation into the matter remains ongoing.

Last month, the majority of the Summit Ascent board of directors resigned in objection to the company’s intended departure from the Russian casino market, involving the sale of its shares in Tigre de Cristal, an integrated resort (IR) situated in the Primorye economic zone.

The action resulted in Andrew Lo Kai Bong staying on as the sole remaining director and chairman.

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