Inside Asian Gaming

INSIDE ASIAN GAMING | June 2012 48 Briefs Regional Briefs Francis Lui to assume control of Galaxy Lui Che-woo, founder of construction materials and property development company K. Wah International and Galaxy Entertainment Group, which runs casinos in Macau, outlined how management of the two companies would pass to his children. Dr Lui said that while he was not retiring, he had divided his empire. “They are already in their positions,” a spokeswoman for K. Wah said. “He did not exactly use the word succession plan, but it does have similar meaning.” Eldest son Francis Lui will take charge of Galaxy and run the Macau business, the spokeswoman said. The second son, Lawrence, will take care of the family’s business in the United States, while younger son Alexander Lui will take over the property business in Hong Kong, she said. Report of payments solicited from LVS by “someone high ranking in Beijing” The Wall Street Journal ’s Kate O’Keefe reported on 8th June that Las Vegas Sands Corp’s outside legal adviser in Macau had relayed to the company an alleged offer from “someone high ranking in Beijing”to secure long-awaited government approval to sell a luxury- apartment complex in Macau, as well as to settle a legal dispute, in return for a payment of US$300 million. The revelation was apparently contained in emails reviewed by The Wall Street Journal and sent by attorney Leonel Alves. Mr Alves, a Macau legislator and a member of both the Chinese and Macau governments’ top political advisory bodies, was hired by LVS to be a conduit to government officials, said people familiar with its Macau operations. Mr Alves said in a text message that any claims that he suggested bribing government officials were “totally untrue,” and that “nothing had happened.” According to the WSJ report, “the emailed offer underscores how high—and dangerous—the stakes are for US companies whose fortunes depend on Macau’s lucrative casino market, which last year raked in more than five times as much gambling revenue as the Las Vegas Strip and is tightly controlled by the government.” While it wouldn’t comment specifically on the emails, LVS said in a statement that “at no time has there ever been any suggestion that the company made any improper payments or received any improper benefits.” The Macau government declined to comment. The Chinese government didn’t respond to requests for comment. In March 2011, LVS disclosed that the US Securities and Exchange Commission and the US Justice Department were investigating whether it had violated a US law prohibiting foreign bribery. The agencies declined to comment. The company has said it is cooperating with the probes. Mr Alves’s name has surfaced in both the US foreign-bribery investigation and in a wrongful-termination lawsuit against LVS filed in Clark County court in Nevada by Steve Jacobs, the former head of the company’s Macau unit. LVS has said some parts of the US investigation overlap with the lawsuit. In his suit, which is still pending, Mr Jacobs said he had warned company officials that Mr Alves’s employment “posed serious risks” to LVS because of a US law barring US companies from bribing foreign officials to win or retain business. LVS fired Mr Jacobs in July 2010. Mr Alves, who had parted from the company amid disputes earlier that year, according to a top company executive, was rehired weeks after Mr Jacobs’s dismissal. Mr Jacobs’s lawsuit alleges that Sheldon Adelson, the company’s chairman and chief executive, demanded that it continue to use Mr Alves. In its statement, the company called Mr Jacobs “a disgruntled former employee,” adding that “the allegations raised as part of that litigation will be debunked.” The emails from Mr Alves, which cover the last few months of 2009, arrived as LVS was under intense pressure from the global financial crisis and Chinese visa restrictions that had made it harder for the mainland’s citizens to visit Macau, the source of more than half the company’s revenue. The company’s shares plunged that year by as much as 99% from their 2007 peak, and it had been forced to raise billions by selling bonds and shares to avoid violating debt covenants. Mr Adelson had provided cash infusions. LVS, which had announced plans for an initial public offering of its Macau unit on the Hong Kong Stock Exchange, was particularly eager at the time for permission to sell the Four Seasons-branded apartments it had built next to its Venetian Macao casino-resort to boost the IPO’s value, said a person familiar with its strategy. But it needed government approval for the potentially lucrative sale because the land had been designated for casino and hotel projects only. The company has valued the apartment complex at US$1.4 billion. Meanwhile, Las Vegas Sands Cop was fighting a lawsuit by Taiwanese businessman Marshall Hao, a former partner who accused it of improperly terminating a 2001 agreement to make a joint bid for Francis Lui