Donaco wins legal round against former Thai casino vendors

TAGs: Cambodia, donaco international, Star Vegas

donaco-star-vegas-casino-cambodia-court-rulingCasino operator Donaco International has won a legal round against the former Thai vendors of its flagship Star Vegas casino in Poipet, Cambodia.

On Wednesday, the Australian-listed Donaco announced that an Appeal Court in Cambodia’s capital Phnom Penh had rejected the Thai vendors’ bid to seize various Star Vegas assets, including the casino’s Cambodian bank account, as security against a debt the vendors claim to be owed.

Donaco purchased Star Vegas from the Thai vendors in 2015 and hired them to manage gaming operations for the next two years. In 2016, the vendors built an adjoining gaming hall, Star Paradise, at which Donaco was supposed to manage gaming operations for a monthly fee of around $144k.

However, once their initial Star Paradise deal with Donaco expired, the vendors took over management of the venue’s gaming operations themselves. Donaco accused the vendors of violating a non-compete clause, and things were officially off to the races.

The vendors countered that they were owed a management fee for Star Vegas’ operations for the full year of 2017 but Cambodian courts rejected the vendors’ asset seizure attempts on two previous occasions. The Appeal Court ruling is the final stop along this path, putting an end to what Donaco called “a campaign of legal harassment.”

Donaco struggled to contain its optimism regarding Wednesday’s ruling, as this is the same court that’s considering Donaco’s appeal of a different ruling that found the vendors had the right to terminate the Star Vegas property lease.

That dispute centers on Lee Hoe Property Co Ltd, an entity owned by the vendors, which sought to terminate the 50-year Star Vegas lease, based on the vendors’ claim that Donaco had failed to pay rent for five months. Donaco claimed their landlord had only ever accepted payments in cash and simply stopped coming round to collect without providing Donaco with any other payment option.

With all this strife occupying its attention, it’s no great surprise that Donaco announced plans last month to ‘leave the past behind’ by rebranding as Pan Asian Leisure Ltd. Besides its very public legal squabbles and executive shuffling, Donaco’s share price has taken a pounding over the past couple years and the distracted company’s financial performance has only recently shown signs of life after a long period in the dumps.


views and opinions expressed are those of the author and do not necessarily reflect those of