Hong Kong’s Securities and Futures Commission (SFC) has commenced legal proceedings against the Chairman and controlling shareholder of LET Group Holdings and Summit Ascent Holdings, Andrew Lo, for alleged misconduct that has resulted in the trading of shares of both companies to be suspended.
The proceedings, filed under section 214 of the Securities and Futures Ordinance in the Court of First Instance, seek a share repurchase order to protect the interests of independent minority shareholders of both companies, the SFC said. Such an order would require Lo, LET and/or Summit Ascent to make an offer to purchase shares from both companies’ minority shareholders independent of Lo at a price and in a manner to be determined by the Court.
The SFC is also seeking a disqualification order against Lo for his alleged misconduct towards members of LET and Summit Ascent.
The case relates to Lo’s efforts earlier this year to sell off the group’s interest in the entity that controls its Russian integrated resort, Tigre de Cristal. Although the transaction ultimately fell through, the SFC had in February directed the Hong Kong Stock Exchange to suspend dealings in the shares of both LET Group and Summit Ascent due to concerns regarding the “very substantial disposal”, which it claims was conducted without the necessary approval of shareholders.
The planned sale of Tigre de Cristal, designed to help fund the group’s US$1.1 billion casino hotel development in Manila, ultimately saw the majority of directors step down from the boards of both LET Group and Summit Ascent in protest.
In its legal proceedings against Lo, the SFC said an investigation had found that Lo “deliberately disregarded the applicable Listing Rules and the requirements under the Code on Takeovers and Mergers and caused both LET and Summit Ascent to enter into agreements to dispose of their assets in Russia in early 2024.”
It added that Lo disregarded legal advice regarding non-compliance with the Listing Rules and the disapproval by the other directors of LET and Summit Ascent; caused LET and Summit Ascent to announce that the planned disposal of assets would proceed without disclosing the non-compliance issues to the shareholders of both companies; and disregarded the regulatory concerns raised by the SFC … regarding the non-compliance issues and continued to procure the two companies to proceed with the planned disposal of assets, resulting in the trading suspension of the shares of both companies.
Summit Ascent continues to hold a 77.5% stake in Tigre de Cristal operator Oriental Regent, while LET Group, formerly known as Suncity Group, owns 69.66% of Summit Ascent.
Lo assumed control of both companies following the arrest of former Suncity Group chairman Alvin Chau in late 2021.
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