Following his arrest by police in mainland China over the weekend and Alvin Chau Cheok Wa (pictured) is reportedly set to stand down as Chief Executive Officer for Asian casino investor Suncity Group Holdings Limited.
According to a report from Inside Asian Gaming, the 47-year-old entrepreneur was detained in Zhejiang Province on Saturday over allegations that his wholly-owned Suncity Group junket enterprise has been illegally providing Chinese citizens with the ability to gamble. The source detailed that this action was complimented by the subsequent arrest of eleven connected individuals in Macau over claims that they had also facilitated cross-border gambling and helped Chau to establish an iGaming operation in Philippines targeted at mainland punters.
Following these arrests and Suncity Group Holdings Limited reportedly issued a statement in which it declared that Chau ‘has indicated his intention to resign from the posts of the chairman of the board and an executive director of the company.’ The Hong Kong-listed firm purportedly holds a majority stake in Summit Ascent Holdings Limited, which is responsible for eastern Russia’s Tigre De Cristal property, while also being behind the impressive $4 billion Hoiana integrated casino resort currently taking shape in Vietnam.
However, Inside Asian Gaming reported that Chau is moreover the majority shareholder in Suncity Group Holdings Limited and has provided this firm with substantial sums of cash as it endeavors to further expand its holdings into other Asian markets such as the Philippines. The source disclosed that this support includes the August of 2020 deal that saw the billionaire entrepreneur exchange some $500 million in investor loans for perpetual securities and the subsequent injection of around $775 million via similar indemnities.
In its Monday filing and Suncity Group Holdings Limited reportedly warned that Chau’s arrest could now lead to a funding gap while noting that his Suncity Group enterprise additionally serves as ‘a key supplier of hotel accommodation products to the group under its travel and related business segment.’ This latter alliance produced revenues of approximately $4.1 million for the twelve months to the end of June, which equated to 17.4% of the company’s total takings.
Reportedly read the filing from Suncity Group Holdings Limited…
“In the event of any inability of Suncity Group to provide hotel accommodation products to the group and the group is unable secure alternative supplies, the travel-related businesses segment of the group will be adversely affected.”
In related news and the South China Morning Post newspaper reported yesterday that the arrest of Chau is furthermore being blamed for wiping some $4.8 billion off of the aggregated stock valuation of Macau’s exclusive six-strong club of licensed casino operators. This source divulged that MGM China Holdings Limited was the biggest of the losers yesterday as the value of its shares sunk by 10% although Sands China Limited and Galaxy Entertainment Group Limited both experienced depressing 5% slumps.
Overall and the Hong Kong-headquartered newspaper reported that the stock valuations for Macau’s six casino operators plunged by an average of 7.6% on Monday, which represented the biggest slide since September 15 when the government for the former Portuguese enclave publicized its draft plans on overhauling the local gambling industry.
The newspaper finished by reporting that Suncity Group Holdings Limited had been hoping to escape the worst of this depression by having its shares as well as those for its Summit Ascent Holdings Limited enterprise suspended from the Hong Kong bourse yesterday. Nevertheless, JPMorgan Chase and Company purportedly predicted that both of these companies could see their valuations drop by as much as 50% in what the multinational investments specialist termed a ‘really bad’ result.