Despite a first-quarter revenue increase of 7%, Donaco isn’t happy with the performance of the men running the show, the Lim brothers. They recently spoke out on the need of a board reshuffle and some shareholders are now looking for the brothers to be removed.
According to a filing with the Australian Securities Exchange (ASX), where Donaco is listed, yesterday, Spenceley Management Pty Ltd and Antonia Carolina Collopy have called for an unscheduled general meeting in order to determine how best to remove Ben Lim Keong Hoe and Joey Keong Yew from the board. Spenceley is a trustee for the Spenceley Family Trust and the Spenceley Family Superannuation.
According to Australian laws, once a meeting has been requested, it has to be held within two months. Donaco’s announcement indicates that it is preparing to put the meeting on the calendar as required.
Joey Lim is the former CEO and managing director of Donaco. He was pushed out on March 19 for performance issues and Ben Lim stepped in as interim CEO. Both of the brothers are linked to the family that founded Malaysia-based Genting.
There have been some questionable maneuvers at Donaco over the past year that have brought the company to where it is today. Most notably, the Australian Takeovers Panel announced earlier this month that it would block the acquisition by OL Master (Singapore Fund 1) Pte Ltd of 8.71% of Donaco in what could only be described as a plot from a poorly-written soap opera.
Donaco has several gambling houses in towns that border Thailand and mainland China, where gambling is illegal. Among its many other problems, the company has been embroiled in a drawn-out dispute with several former Thai business partners and that ordeal is costing the company money. For its last fiscal year, which ended June 30, 2018, the company reported a loss after taxes of $88.4 million, thanks to a cash impairment as a result of that dispute. This past February, it said that it is still operating at a loss, but that the loss had been reduced in the six-month period ending December 31.
The continued issues have not left investors with a great deal of confidence in the Lim brothers. Even the Australian Securities and Investments Commission is looking to dump its almost 80 million shares in the company.
