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Czech investors say mistreated by Austria in casinos bid and plan court action
November 3, 2015 / 12:58 PM / 2 years ago

Czech investors say mistreated by Austria in casinos bid and plan court action

PRAGUE, Nov 3 (Reuters) - A group of Czech investors says it suffered discriminatory treatment by Austria’s finance ministry over a bid to raise its stake in Austria’s lottery and casino business and is planning legal action over the matter, one of the investors told Reuters.

The investors had wanted to raise their stake in Casinos Austria, operator of Austrian lotteries, online gaming sites and a string of global casinos, and say their 11.3 percent stake gave them right of first refusal if other shares were being sold.

But a Casinos Austria shareholders’ meeting in October voted to block that right, allowing gaming systems supplier Novomatic to proceed with raising its own stake through the acquisition of a 16.8 percent stake from private shareholder MTB.

Jiri Smejc, whose Emma Capital in September bought the 11.3 percent indirect stake in Casinos Austria, via a joint venture with investment group KKCG dubbed Austrian Gaming Holding, said Austrian authorities had mistreated his investor group by voting against its bid to raise its stake.

“The situation really seems outrageous to us,” said Smejc, one of the richest Czech businessmen and co-investor in Greek lottery firm OPAP.

“We have the feeling that we are being discriminated against by the steps of the Austrian finance ministry. This is something which is basically unacceptable in the European Union,” Smejc told Reuters in an interview on Monday at his Prague offices.

The state has a 33.2 percent stake in Casinos Austria via an agency called OBIB.

Smejc said he believed discrimination was also shown in comments by Austrian Finance Minister Hans Joerg Schelling, quoted in daily Kurier in September as saying the business should remain in Austrian hands.

The Austrian Finance Ministry directed questions on the matter to OBIB, whose general secretary Martha Oberndorfer said its legal opinion showed the Czech group was not entitled to right of first refusal and the shareholder decision had nothing to with the investors’ nationality.

The vote avoided possible legal challenges from other shareholders, she told Reuters in an email.

Smejc did not say when any legal action would be taken. His spokesman said the timing of the next steps would be debated on Friday. (Additional reporting by Michael Shields in Vienna; Editing by David Holmes)

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