Global gaming and lottery product developer Scientific Games Corporation has launched legal action in Nevada against one of its own shareholders alleging refusal to comply with requests for information related to suitability requirements.
According to a weekend report by US-based CDC Gaming Reports, the company in question is Hong Kong’s Sylebra Holdings – the third largest shareholder in Scientific Games with its 8.6 million shares, valued at US$177.8 million, representing a 9.34% stake.
In its lawsuit, Scientific Games said it has “repeatedly asked Sylebra for basic information to allow the Corporation and its Board to carry out its own suitability analysis. Time and time again it has refused.”
It added that, despite requests for information about the identities of its beneficial owners, Sylebra has “manipulated the regulatory system by strategically timing the disclosure of information that it is willing to part with while utilizing procedural mechanisms to prevent any order requiring it to turn over the information that actually matters.
“This sustained pattern of obfuscation, procedural maneuvering and outright stonewalling … raises serious questions about just what Sylebra might be trying to hide.”
The lawsuit says investigators found that Sylebra owns a sizeable stake in a Russian company with alleged links to illegal gambling, money laundering and funding of terrorist organizations.
Scientific Games is seeking a court ruling to compel Sylebra to provide all necessary information. If Sylebra subsequently continued to resist, Scientific Games could choose to declare the company a disqualified holder under its own corporate bylaws, ultimately forcing a redemption or sale of Sylebra’s shares.
