A SHAREHOLDER of Asiabest Group International, Inc. (ABG) has asked the Securities and Exchange Commission (SEC) to stop Tiger Resorts Asia Ltd. (TRAL) from conducting a tender offer for its planned backdoor listing, citing the company’s failure to disclose a legal dispute with Japanese casino tycoon Kazuo Okada.
ABG shareholder Carnell S. Valdez through his lawyer Salvador Paolo Panelo, Jr. filed on Dec. 7 a complaint with the SEC’s Market and Securities Regulation Department (MSRD), requesting it to issue a cease and desist order against TRAL. This should stop the firm from its ongoing tender offer until Dec. 12.
Mr. Valdez, who owns 1,000 shares in ABG, accused TRAL of violating Rule 19.12 of the Securities and Regulation Code (SRC)’s Implementing Rules and Regulations (IRR) when it failed to disclose the legal issues surrounding its dispute with Mr. Okada.
Mr. Okada is currently claiming that he is the rightful owner of controlling equity in Okada, Holdings Ltd. (OHL) and Universal Entertainment Corp. (UEC) — the beneficial owners of TRAL — through civil and criminal proceedings in Hong Kong.
TRAL fully owns Tiger Resorts Leisure and Entertainment, Inc. (TRLEI), which operates under the name Okada Manila.
Contesting that he was illegally removed as the chairman, CEO, and director of TRLEI, Mr. Okada filed a complaint with the Regional Trial Court of Parañaque last Aug. 29 against TRAL and TRLEI.
Mr. Okada also said in an earlier statement that he opposes the planned backdoor listing, and plans to nullify the decision should he regain his position in the company.
“The omission of this material fact is misleading as it makes it appear to ABG shareholders and the investing public that OHL, UEC, and TRAL have full and undisputed authority to make the tender offer, and to do a backdoor listing with the Philippine Stock Exchange (PSE)” via ABG, which is TRAL’s announced objective,” Mr. Valdez said in his complaint.
“This will likely affect the ABG’s share price and the decision of ABG shareholders and prospective investors because it goes into the suitability of TRAL, UEC and OHL’s controlling persons to be in control of a publicly listed corporation such as ABG,” Mr. Valdez said in a statement.
Other respondents in the complaint were TRAL’s tender offer agent First Resources Management and Securities Corp., the PSE, and ABG
Without the cease and desist order, the shares tendered will be transferred to TRAL through a special block sale on Dec. 14.
“If the Tender Offer proceeds unrestrained, this may result in grave and irreparable damage to ABG, its shareholders and investing public as the outcome of the Hong Kong legal proceedings may result in the nullification of the Tender Offer and Backdoor Listing,” Mr. Valdez said.
Mr. Valdez also said TRAL violated Rule 19.7 of the SRC’s IRR when it failed to divulge its officers and directors at the time it made the tender offer report.
ABG in a Sept. 19 disclosure clarified that it cannot submit a proper disclosure about the ongoing case without stepping on the sub judice rule, “which restricts any person, including the PSE, to comment and disclose matters pertaining to the judicial proceedings in order to avoid prejudging the issue, influencing the court, or obstructing the administration of justice.”
BusinessWorld tried to get the SEC’s comment on the matter, but the commission has yet to reply as of press time. — Arra B. Francia
