Sands Casino’s Macau Arm Faces HK Probe

By webadmin on 09:24 pm Mar 31, 2011
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Beh Lih Yi

Hong Kong. The Macau unit of casino giant Las Vegas Sands said on Thursday it was being probed by Hong Kong regulators, a month after US authorities launched a bribery investigation into the company.

Sands China said it has been informed by the city’s Securities and Futures Commission that it was being probed over “alleged breaches of the provisions of the Securities and Futures Ordinance.” The company did not elaborate.

In a statement to Hong Kong’s stock exchange, the company said it has also been requested “to produce certain documents” to facilitate the probe.

“The company is not permitted to comment further at this time,” Sands China said in the brief statement.

Sands China confirmed at the start of this month that it was under a US Securities and Exchange Commission investigation after its fired head alleged he was told to spy on government officials in the Asian gambling hub.

The company is being probed under the Foreign Corrupt Practices Act, which prohibits US companies from bribing foreign officials, and carries a penalty of up to five years in prison.

That followed a similar investigation by the US Justice Department into the company, which has shifted the focus of its business away from the stagnant US market to Macau, the world’s biggest gambling hub.

It was not immediately clear whether the Hong Kong probe is linked to the US action.

News of the fresh investigation sent Sands China’s shares tumbling 5.65 percent to end at 17.36 Hong Kong dollars ($2.23) in Hong Kong.

Huei Suen Ng, gaming analyst at brokerage CLSA, said the action was not unexpected but added: “Investors are more likely to focus on other gaming stocks such as Wynn Macau, SJM and Melco Crown for the time being.”

Sands is one of six companies holding a license to operate casinos in Macau.

The firm has said the US investigation stemmed from a wrongful termination lawsuit filed in October by Steven Jacobs, the fired chief executive of its Macau unit, who claimed the US operator’s billionaire founder Sheldon Adelson made “repeated and outrageous demands” on him.

Those demands included arranging “secret investigations” of Macau officials to use as leverage against negative policy decisions and threatening to withhold business from “prominent Chinese banks” if they refused to use “influence” on senior officials.

Jacobs also said he was forced to keep secret “truthful and material information” from Sands’ board, including allegations of ties between the company and Macau’s notorious triad gangs, long reputed to operate in the city’s casinos.

Sands has denied the allegations, calling Jacobs a “disgruntled former executive” fired for good cause.

The former Portuguese colony fell under the spotlight of US gaming regulators last year when New Jersey’s gambling watchdog released a previously confidential report that alleged gambling tycoon Stanley Ho had links with Macau’s criminal underworld — a claim he has denied.

Agence France-Presse