Scientific Games Corporation taking third largest shareholder to court

American lottery and gaming machines innovator, Scientific Games Corporation, is reportedly taking its third largest shareholder to court in an effort to get the entity to hand over information required for an in-house suitability investigation.

Nevada lawsuit:

According to a report from CDC Gaming Reports, the Las Vegas-headquartered firm filed its action with Nevada’s Eighth Judicial District Court on Friday amid allegations that defendant Sylebra Holdings has continually failed to disclose materials needed for the inquiry, which is a requirement of its own corporate bylaws.

Siz 7BALL eable stake:

Sylebra is reportedly headquartered in Hong Kong but also has sizeable business interests registered in the Cayman Islands. It has purportedly been investing in Scientific Games Corporation for around four years and currently holds approximately 8.6 million shares to give it a 9.34% stake that is said to be worth about $177.8 million.

Unsavory accusations:

However, CDC Gaming Reports detailed that the lawsuit from Scientific alleges that its own preliminary investigation into Sylebra found that the firm moreover has holdings in an unnamed Russian firm that may have ties to money laundering, illegal gambling and terrorist funding organizations. The Clark County legal action furthermore purportedly contends that the defendant has been refusing to supply information relating to the identities of its own investors for around two years and that this ‘raises serious questions about just what’ the private hedge fund ‘might be trying to hide.’

Considerable consequences:

Susan Cartwright, a spokesperson for SG Corp, reportedly told CDC on Saturday that her firm’s own bylaws dictate that the continued failure of Sylebra Holdings to hand over the required information could result in the investor being tagged as a ‘disqualified holder’, which would force the defendant to redeem or sell off its entire stake. She purportedly furthermore stated that the Nevada gaming giant ‘must be assured of the suitability of our major investors’ so as to fulfill an ‘obligation to maintain the highest standard of integrity and transparency’ with regulators around the United States and the world.

More:  Stadium Casino awarded license for new mini casino at Westmoreland Mall in Pennsylvania

Cartwright said…

“Scientific Games Corporation has now filed a lawsuit against Sylebra Holdings in Nevada state court asking for a ruling that Sylebra Holdings be required to provide us with the information we need to maintain the integrity and transparency our regulators expect and require of us.”

Discovery delay:

The lawsuit from SG additionally described the capital management structure of Sylebra as ‘unusual’ while asserting that it has never received any information regarding the identities of the investor’s master fund or details relating to any of its other holdings.

According to the lawsuit…

“Instead, Sylebra Holdings 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.”

The lawsuit also asserted that ‘this sustained pattern of obfuscation, procedural maneuvering and outright stonewalling’ has raised ‘serious questions’ about Sylebra Holdings that have only swelled following a recent alteration of its ‘ownership and management.’

Additional investors:

The MacAndrews and Forbes Incorporated enterprise of billionaire American businessman, Ron Perelman, is the largest shareholder in SG Corp with a 39.2% stake while second spot is occupied by New York-based asset management fund Fine Capital Partners courtesy of its own 9.7% investment.