Baazov’s Interest in Canada Gaming Firm draws more Controversy

For much of this year, it’s been a well known fact that David Baazov, former CEO of Canada poker giant Amaya Gaming (parent company of PokerStars), wants to acquire the firm and take it private. Once he finally submitted a bid, controversy ensued from all angles. One of the company’s minor shareholders is now throwing more fuel on the fire.

Jason Ader (pictured right) is a New York investor with a small 2-3% stake in Montreal-based Amaya Gaming. He wrote a letter to the board, as noted by Bloomberg on Tuesday, that blasted Baazov’s interest in the company, and urged them to reject his bid.

Ader suggested the board free themselves of Baazov’s “undue influence” on the firm, and get back to the business of growing the company. His obsequious comments were undoubtedly in reference to the brand’s price fluctuation on the stock market since the controversy surrounding the former CEO’s bid first arose.

In a follow-up interview with Bloomberg regarding the letter, Ader explained his intent.

“If I were making a $4 billion bid and would want the shareholders to take me seriously, I would provide much more transparency to the shareholders,” he said. “Amaya needs to get back to growing the business. It’s competitive out there.”

Baazov’s Bid Embroiled In Controversy

While privatization could be beneficial to the Canada poker giant’s parent company, the way Baazov went about submitting his initial bid was questionable, to say the least. He mentioned four backers that he claimed were willing to fund his original $6.7 billion offer. However, two of those backers turned out to be illegitimate.

One of them, KBC Aldini Capital Ltd out of Dubai, actually filed a complaint against David Baazov with the SEC, claiming it had no knowledge of the deal. Another, Ferdyne Advisory Inc., turned out to be a formerly dissolved company once located in the Caribbean.

Following the scrutinizing gaze of the SEC, Baazov returned the next week with a new bid, offering the same $24/per share. This time, Baazov claimed he had secured $4.1 billion from the other original backers; two Hong Kong companies, Head and Shoulders Global Investments Fund SPC and Goldenway Capital SPC.

Ader Says No Transparency, No Consideration

“If we have a credible bid with transparency, then we should consider it,” Ader continued. “But the current price seems low and the lack of transparency and the information about the sources of funding raises a lot of questions.”

It certainly doesn’t help that the reason David Baazov removed himself from the CEO position at Amaya earlier this year was due to an insider trading scandal. He and several others were accused by Quebec securities regulators of dealing in privileged information that helped them make millions off the stock market around the time the company acquired online poker juggernaut PokerStars in 2014.

Ader believes that if Amaya continues to remain embroiled in these controversial dealings – or worse, if Baazov regains control of the company – it will only serve to post more obstacles in terms of stock price fluctuation.

He told Bloomberg the Canada poker firm must disentangle itself from the “continued attempt by a discredited former executive to capitalize on the Amaya situation at other shareholders’ expense.”