Macau casino junket operator sinks as arrested boss offers to step down from listed Hong Kong units
- Suncity Group and Summit Ascent shares resumed trading in Hong Kong with steep losses after the arrest of major shareholder and chairman Chau
- Casino stocks fell again after suffering a US$4.8 billion rout on Monday on news of arrests linked to illegal cross-border gambling activities
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.
Suncity sank 48 per cent to HK$0.13 in Hong Kong. Summit Ascent crashed 63 per cent to HK$0.18. The Hang Seng Index declined 1.5 per cent to a 14-month low, while Macau casino concessionaires also retreated. Sands China and MGM China, Galaxy Entertainment tumbled 2.3 per cent to 5 per cent.
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.
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“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.
