Hong Kong SFC seeks share repurchase order for LET Group and Summit Ascent

The Securities and Futures Commission of Hong Kong aims to protect independent minority shareholders of both companies.

Hong Kong.- The Hong Kong Securities and Futures Commission (SFC) has announced that it has started legal proceedings to obtain a share repurchase order to safeguard independent minority shareholders of LET Group and Summit Ascent.

The lawsuit was filed in the Court of First Instance due to the alleged misconduct of Andrew Lo Kai Bong, chairman, executive director and controlling shareholder of both companies. According to the statement issued by the SFC, the proposed 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 to disqualify Andrew Lo due to his alleged misconduct towards the companies’ members.

LET Group is engaged in casino project investments and holds control over Summit Ascent, which operates the Tigre de Cristal casino resort in Primorye, Russia. Both companies became non-compliant with Hong Kong stock exchange regulations in January after a series of director resignations following an initial attempt to sell the entity that holds the gaming licence for Tigre de Cristal.

LET Group and Summit Ascent suspended trading on the SFC and, in February, an investigation into both firms was launched for a potential breach of regulations related to a proposed sale of the Russian business. The regulator stated that a previous sale agreement, which was later terminated, was executed without the necessary shareholder approval.

The SFC’s statement indicated that Andrew Lo’s alleged misconduct led to the suspension of LET and Summit Ascent shares. The SFC’s investigation also 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.” 

Despite the termination of the planned asset sale, the SFC alleged that Andrew Lo failed to “disclose all relevant material information to LET and Summit Ascent and their shareholders; apply reasonable skill, care and diligence in the performance of his duties as director of both companies; and ensure their full compliance with the Listing Rules and the Takeovers Code.”