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Donaco wins freezing order extension against Thai vendors

Sunday, 03 June 2018 10:30
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Australian-listed Donaco International Limited has been granted an extension to an injunction issued by the Supreme Court of New South Wales in early April to freeze shares held by the Thai vendors of its Star Vegas casino resort in Cambodia.

In a Friday filing to the Australian Securities Exchange, Donaco revealed that the freezing order has now been extended to 2 November 2018 when the matter is listed for further direction.

Donaco is seeking damages of US$120 million from the vendors – Somboon Sukcharoenkraisri and his two sons Lee Bug Huy and Lee Bug Tong – for continuing to run gaming operations in defiance of non-compete provisions at Star Paradise, which is located adjacent to Star Vegas in Poipet.

The trio had previously been granted permission to host gaming facilities under the management of Donaco in a deal that saw the latter paid a monthly management fee of THB5 million (US$151,000), but that agreement expired in 2017 with no new management arrangements put in place. Under the terms of non-compete provisions, the vendor is not allowed to be involved in any other casino or gaming business in the Poipet area.

Donaco won an injunction via a Cambodian court in December to close Star Paradise casino and is continuing to pursue enforcement of its legal rights via arbitration proceedings in Singapore. Arbitration awards from Singapore can be enforced in both Cambodia and Thailand.

The Australian freezing order “restrains the defendants, by themselves and their servants and agents, from selling, disposing of or otherwise alienating their interest in the share capital of Donaco, until the final resolution and payment of any award of damages in the Singapore arbitration proceedings initiated by Donaco,” according to a previous company filing.

The defendants own 148 million shares in Donaco, representing approximately 17.9% of the company’s issued capital.

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