In Australia and casino operator, Melco Resorts and Entertainment Limited, has reportedly won a legal challenge tied to the ongoing probe into its suitability to purchase an increased stake in local compatriot Crown Resorts Limited.
According to a report from GGRAsia citing a story from The Australian Financial Review newspaper, the Hong Kong-based firm is being investigated by the New South Wales Independent Liquor and Gaming Authority after inking a $1.2 billion deal in May that was to see it acquire an almost 20% stake in Crown Resorts Limited via two tranches.
The official examination is reportedly interested in ascertaining whether the proposed transaction may constitute a ‘breach’ of Crown’s gaming license due to the involvement of Lawrence Ho Yau Lung. This billionaire businessman serves as Chairman and Chief Executive Officer for Melco Resorts and Entertainment Limited but is also the son of nonagenarian Macau casino magnate Stanley Ho Hung Sun, who is said to have previously been prohibited from investing in casinos in Australia due to allegations that he built his gambling empire through links with organized crime groups.
GGRAsia reported that Melco filed an action with the Supreme Court of New South Wales late last month after the regulator’s inquiry sought access to documents it claimed were legally privileged. It purportedly argued that it should not have to produce these sensitive papers because the investigation from the New South Wales Independent Liquor and Gaming Authority did not have the same sweeping powers as an Australian Royal Commission.
In its Monday ruling, the state’s highest court reportedly ruled that the regulator had exceed its authority in requesting the restricted information and that the ‘privileges including legal professional privilege’ of Melco Resorts and Entertainment Limited had not been ‘abrogated for the purposes of the inquiry.’
However, the ruling may have been something of a moot point after the plaintiff proclaimed last week that it would not be following through with the second tranche of its envisioned Australian acquisition due to the ‘impact of the coronavirus epidemic’ as well as the need to use capital on ‘core assets.’ Such a move is purportedly set to leave Melco Resorts and Entertainment Limited with only about a 9.99% stake in Crown Resorts Limited, which is a shareholding that does not require approval from the New South Wales Independent Liquor and Gaming Authority.