Halex Holdings Bhd has abandoned its plans to diversify into the gaming business.
In a filing to Bursa Malaysia on Thursday, the company announced it will no longer acquire at least 51 percent equity in Cambodian lottery operator VW Win Holdings Plc.
Back in September, Halex International Sdn Bhd signed a memorandum of understanding to acquire a part of VW Wing Holdings. The proposed acquisition, however, is still subject to several conditions.
Among those conditions is that Halex must receive a written approval from Cambodian authorities in connection with the proposed sale and purchase of shares, while VW Win must complete a legal and financial due diligence on the business, and also obtain approval from its shareholders as well as Bursa Malaysia and Security Commission Malaysia.
Now, Halex said the lottery operator wasn’t able to provide the complete documentation that would enable them to “carry out the requisite due diligence exercise as stipulated in the MoU.”
“As such, the company has decided to terminate the MoU with Goh Teik Keng, the major shareholder of VW Win Holdings Plc,” Halex said in a statement.
VW Win has been operating Camloto, a licensed lottery gaming business, in Cambodia since 2013. Camloto’s license, which is subject to yearly renewal, is valid until June 26, according to The Star. The private limit company also has plans to apply for and operate an online gambling license in the country.
Had the deal pushed through, VW would’ve had to provide a valid guarantee that VW’s net profit after taxes will not be lower than $3 million for period of three years starting 2016.
Cambodian laws don’t expressively forbid online gambling in the country, but it hasn’t stop law enforcement authorities from arresting operators who set up shop within the borders, particularly in Poipet, the special economic zone that borders Thailand.