Hong Kong’s stock market regulator said in a statement on Wednesday that the proposed acquisition of former Suncity Group Holdings should be valued much higher than what was proposed.
The Hong Kong Securities and Futures Commission’s M&A Committee (SFC) said the offer for Major Success Group Ltd’s Suncity Listco (currently LET Group Holdings Ltd) should be HK$0.0690 (US$0.008917) per share of Suncity Group Holdings, rather than the proposed HK$0.0029. This represents a 2,279% difference between the actual offer and the regulator’s valuation of the shares.
The panel also said the proposed offer price, HKD0.0029, was a “approximately 94.82% discount” on the May 12 closing price, HKD0.056, when trading in the stock was paused.
It also indicated an “approximately 99.60% discount” on Suncity Group Holdings’ audited consolidated net asset value of “approximately HKD0.7239 per Suncity share as of December 31, 2021.”
The panel noted that the “ultimately beneficial owner” of Major Success Group is Andrew Lo Kai Bong. Lo is a former business colleague of Alvin Chau Chauke Wa, and the latter is the former chairman of Suncity Group Holdings.
Mr Lo acquired controlling shares of the latter company from May 13, according to transaction records filed with the Hong Kong Exchange.
Those who currently control Suncity Group Holdings will offer about 25% of companies that do not already have the unconditional mandatory cash offer required under exchange rules, it was announced in July.
In an 18-page investigation released on Wednesday, the transition team mentioned a HK$300 million loan contracted by Mr Chow and the parties involved in Suncity Group Holdings.
The panel considered that the proposed acquisition deal “includes Chow’s exemption from liability under the loan, which is favorable terms as a shareholder, which corresponds to a special transaction under the acquisition code.”
The panel added: “Given that we can quantify the benefits Chow has received, we need to expand to all other SunCity [Group Holdings] shareholders.”
“Mr. Law has received ownership and benefits for the basket of securities originally claimed to exempt lenders from Mr. Chow’s liability under the loan and secure loan repayments, including shares sold to Suncity,” the committee said.
The commission considered “Chawoo’s release of responsibility” following the loan as a “special agreement,” adding that “the total amount of the loan and outstanding interest should be used to determine the quoted price.”
Mr Chow is currently in Macau custody awaiting trial on charges not related to his alleged conduct of illegal gambling.
BY: 릴게임사이트