EARLIER this month Joey Lim Keong Yew, grandson of the late Tan Sri Lim Goh Tong, sought a three-month leave of absence from his position as CEO and managing director of Aussie-listed casino operator Donaco International Ltd “to deal with health and personal matters”.
In an announcement to the Australian Stock Exchange (ASX), Donaco, which runs casinos in Cambodia and Vietnam, said that “as a temporary measure”, Keong Yew’s brother Benjamin Lim Keong Hoe has been appointed interim MD and CEO of Donaco.
Keong Yew is the single largest shareholder in Danaco with 28.10% equity interest, and he jointly holds another 13.03% with Keong Hoe.
Donaco chairman Stuart McGregor said in a press release, “The board is very pleased that Ben Lim has agreed to step up as a senior executive and lead the company through this period of transition. We also congratulate Joey Lim on recognising his need to focus on his personal well-being and health and wish him all the best for a speedy recovery.”
Associates of Keong Yew are in the dark about what is going on. “I’m not sure … I don’t know what the health issues are. It could be minor, it could be major, even, I don’t know,” one associate said when asked to comment by The Edge.
Donaco’s share price has taken a beating recently, hitting a multiple-year low of 3.7 Australian cents last Wednesday for a market capitalisation of A$32.94 million.
The shares were trading at 18 Australian cents a month ago for a market capitalisation of A$148.25 million. In the short span of one month, A$115.3 million in market capitalisation just evaporated.
The company has two main assets — one is a casino-cum-hotel, the Star Vegas in Poipet, Cambodia, and the other is the Aristo International, a hotel with an adjoining casino in Lao Cai, Vietnam.
The board also told the ASX that it “has taken note of recent trading in the company’s shares”.
“In the board’s view, the current share price is in no way reflective of the value of the company’s assets,” Donaco’s board commented.
The casino operator disclosed that the board is conducting a strategic review to consider various ways to eliminate or restructure the Mega Bank debt, and free up cash flow to conduct capital management initiatives.
“The total debt owing to Mega Bank is US$39.9 million, and it is secured only against the assets of the Star Vegas business, not the Aristo business,” it says.
Donaco’s balance sheet as at June 30 showed that the company’s cash pile shrank to A$47.07 million from A$66.02 million the previous year.
News reports from Australia say that Donaco is at loggerheads with a number of Thai businessmen, the previous owners of the casino in Cambodia. According to Donaco, the three former owners have breached an agreement by running casinos that compete with Star Vegas Resort and Club.
The dispute is with arbitrators in Singapore, where Donaco is seeking US$190 million in damages, and in the Cambodian courts as well.
In Cambodia, Donaco obtained a preliminary injunction in December last year, ordering the closure of the two competing casinos. However, the Cambodian Court of Appeal overturned it. It was reported that the injunction was never enforced for whatever reason.
The arbitration in Singapore is slated to be heard at end-July next year.
Meanwhile, the Aristo International Hotel casino in Vietnam has its own set of problems, with patrons being threatened by a Chinese crime syndicate.
Donaco suffered a net loss of A$124.5 million in the financial year ended June 30 (FY2018), which took into account an impairment charge of AS$143.9 million in the value of the casino licence of the Star Vegas Resort due to the disputes. In addition, revenue slid 32% year on year to A$92.6 million in FY2018.
It posted a net profit of A$31.18 million in FY2017.
Disputes with uncles
Keong Yew also has unresolved disputes at home with his uncles. Keong Yew, Keong Hoe and their sister Marie Lim Seok Leng — the children of the late Datuk Lim Tee Keong — filed various lawsuits against their uncles, Tan Sri Lim Kok Thay and Datuk Lim Chee Wah.
Tee Keong was Goh Tong’s eldest and Kok Thay and Chee Wah are the second and youngest sons respectively. They have three older sisters.
Kok Thay is the chairman and CEO of the multi-billion ringgit casino and resort operator Genting Bhd. Chee Wah holds no position in any of the Genting companies.
There are several ongoing court cases but there are two main issues. One is the will of Tee Keong, who was a bankrupt when he died on April 14, 2014. The second is the removal of Keong Hoe and Seok Leng as beneficiaries of the Tee Keong Family Trust, a discretionary trust that was set up by patriarch Goh Tong in 1990 for his son (Tee Keong) and his family.
Court documents revealed that Tee Keong, other than his wife Agnes Tan Bee Gaik, had a union with Joanne Fok, with whom he had two children — Kenneth Lim Keong Wye and Katherine Lim Seok Yan.
The contention is Keong Yew and Keong Hoe are not named as beneficiaries of their father’s will and the two are challenging its validity. Their mother, Tan, was given 10% of Tee Keong’s estate and their sister Seok Leng another 10%, but the bulk was left to his children with Fok — Keong Wye was left with 60% and Seok Yan inherited 20% of his estate.
Tee Keong’s will was signed on March 11, 2014, about a month before he died. Kok Thay and Chee Wah were the executors.
The second dispute stems from the Tee Keong Family Trust, which the late Goh Tong set up under a trust deed dated May 18, 1990. While it is not clear what assets are held in the trust, Keong Hoe and Seok Leng were removed as beneficiaries.
Keong Hoe and Seok Leng contend in their lawsuits that the Tee Keong Family Trust was created and established for the benefit of Tee Keong, his family members and the descendants. They further alleged that they were wrongfully removed as beneficiaries.
Given all these issues, the grandson of the late casino baron is in a position that not many would envy.