Suncity Group, which operates the largest casino junket in Macau, said its controlling shareholder Alvin Chau Cheok-wa plans to relinquish his positions in the group following his arrest over the weekend. The stock slumped.
Chau, arrested by Macau and Chinese authorities over the weekend on alleged links to illegal cross-border gambling and a money-laundering syndicate, offered to resign as chairman and director from the group and its unit Summit Ascent Holdings, according to exchange filings late Monday.
News of his arrest led to a US$4.8 billion sell-off in Macau casino operators amid fears that Beijing is tightening its scrutiny on activity in the former Portuguese colony which has become the world’s busiest gambling hub. A draft regulation in September to overhaul the industry triggered as much as a US$17 billion casino stock rout.
Macau police arrest 11 people including Alvin Chau Cheok-wa, the head of Macau’s biggest casino junket operator, over alleged links to illegal cross-border gambling and a money-laundering syndicate. Photo: Handout
Suncity slumped 55 per cent to HK$0.11 in Hong Kong upon trading resumption. Summit Ascent sank 42 per cent to HK$0.28. The Hang Seng Index declined 0.5 per cent, set for a third day of losses. Sands China and MGM China gained while Galaxy Entertainment slipped again.
Suncity said the group’s business and financial health will suffer without the financial support from Chau and his related companies. His personal vehicle, Sun City Gaming Promotion, supplied hotel accommodation products worth 25.3 million yuan (US$4 million), or about 17 per cent of the group revenue, in the first six months this year.
Chau also guaranteed 125 million yuan of the group borrowings, according to its interim report.
“In the event of any inability of Sun City Gaming to provide hotel accommodation products to the group, and the group is unable to secure alternative supplies, the travel related businesses segment of the group will be adversely affected,” Suncity Group said in the filing.
Both listed entities denied allegations that the entertainment resort called “Tigre de Cristal” in Russia, which is 77.5 per cent controlled by Summit Ascent, was involved in cross-border gambling activities.
“None of the directors, officers or staff of any members of the group has engaged in the solicitation for customers in [China] for the gaming operations of Tigre de Cristal,” Suncity said.
A logo of Macau junket operator Suncity Group is seen at a gaming fair in Macau in November 2015. Photo: Reuters
The weekend arrests are part of an investigation launched in August 2019 into the setting up of gambling platforms outside Macau and the luring of mainland Chinese into betting illegally online, Macau police said on Sunday.
It came two days after police in eastern mainland Chinese city of Wenzhou issued a warrant of arrest for Chau on Friday. The alleged syndicate, led by Chau, had developed a network of more than 80,000 mainland punters, Wenzhou police said.
Chau, 47, operates the largest gambling junket through a Macau unit he founded in 2007. Junket operators are go-betweens who bring high rollers to casinos, extending them credit and collecting interest on their debts.Internet Explorer Channel Network