Inside Asian Gaming

INSIDE ASIAN GAMING | April 2011 6 W hen litigation and/or criminal investigations become bigger news than a company’s core business activity, a significant amount of pressure is placed on the people at the top. Tony Hayward resigned as chief executive of the oil company BP in the wake of the Gulf of Mexico crude spill. Between the time of the accident (claiming 11 lives and blighting hundreds of coastal communities on 20th April last year) and 14th June 2010, the company’s share price almost halved, wiping £50 billion (US$81 billion) off its market capitalisation. In Japan, Masataka Shimizu, the president of Tokyo Electric Power Co (Tepco)—the company that brought us the Fukushima nuclear catastrophe—was still clinging to his job at the time Inside Asian Gaming went to press. But between the 9.0 magnitude earthquake and accompanying tsunami—damaging the coolant supply to the nuclear reactors—on 11th March and the end of that month, Tepco’s share price fell by 80%. That was its lowest level for 47 years and shaved US$29 billion off the company’s market capitalisation. Few outside that country are expecting Mr Shimizu to make it to his company retirement presentation and proverbial gold watch. The headache facing Sheldon Adelson, Chairman and CEO of Las Vegas Sands Corp, is arguably small stuff compared to the blinding migraines experienced by Messrs Hayward and Shimizu, even if it looks bad from the outside. Mr Adelson’s issue stems from the sacking of Steve Jacobs as CEO of Sands China—LVS’s Hong Kong-listed Macau unit—in July 2010. The company said Mr Jacobs was fired “for cause”—namely alleged unauthorised deals and violations of corporate policies. Mr Jacobs then filed a lawsuit in Nevada, alleging that Mr Adelson had ordered him to commit illegal acts in Macau and had also failed to grant him stock options that he was owed. LVS strongly deniestheallegations.MrJacobs’accusations did, however, catch the attention of the US Securities and Exchange Commission (SEC), the financial regulator for New York-listed LVS. The SEC launched an investigation into the Nevada suit claims, looking at possible violations of the Foreign Corrupt Practices Act, a US law prohibiting the bribery of foreign officials by a US company. The US Justice Department and the Nevada Gaming Control Board also began examining the matter and in the third week of March the Federal Bureau of Investigation (FBI) said it too was investigating. The Hong Kong Stock Exchange’s Securities and Futures Commission (SFC) rounded off a maddening March for LVS by announcing on the final day of the month it was launching its own inquiry into Sands China. According to data in the US business newspaper Investor’s Business Daily , from the Blow Out Averted But Las Vegas Sands Corp is hardly helped by its current legal issues In Focus Sheldon Adelson—“just cause” Steve Jacobs—claiming wrongful termination