Asia round-up: Crown Resorts unsuitable; Suncity expects losses, defaults GYE loan

Crown unsuitable to run Perth casino, but won’t lose licence   

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Crown Resorts has been found unsuitable to run its Perth casino, but the operator has been given two years to return to suitability under the watch of an independent monitor.   

The decision is contained in the final report by a royal commission into the company, which was released by the state government.   

The commissioners involved – former Western Australia Auditor General Colin Murphy and former Supreme Court Justices Neville Owen and Lindy Jenkins – found Crown facilitated money laundering at the casino, and that it had failed to implement systems to detect suspicious transactions.   

The operator also permitted junkets with links to criminal activity and failed to minimise gambling-related harm.   

In a statement released to the Australian Stock Exchange, Crown noted that it acknowledges the report, and will work together with the Government in relation to the findings.   

“Crown Resorts Limited has today been notified that the Perth Casino Royal Commission Report has been publicly released after being tabled in the Western Australian Parliament,” said the operator.   

“Crown acknowledges the Perth Casino Royal Commission’s findings and recommendations. Crown will review the report and will work cooperatively and constructively with the Western Australian Government in relation to the findings and recommendations of the report.”   

Crown Managing Director and CEO Steve McCann commented: “Significant progress has been made with Crown’s transformation programme, the implementation of company-wide reforms, and establishing the highest standards of governance.   

“This includes investment in people, systems, processes, culture and a sharp focus on responsible gaming and the prevention of financial crime." 

Suncity Group warns of financial losses, defaults GYE loan   

Crown will review the report and will work cooperatively and constructively with the Western Australian Government in relation to the findings and recommendations of the report” Crown Resorts Limited, Spokesperson

Suncity Group is expected to record a loss for the year ended 31 December 2021 of HK$526.5M (US$67.2m). In comparison, the year ended 2020 profit stood at HK$795.7m.    

The Hong Kong-listed company attributes its loss to the completed disposal of a subsidiary, as well as changes to its functional currency and presentation currency.    

Details of Suncity’s change to a presentation currency of Hong Kong dollars, and the financial implications of this change, will be further disclosed in the announcement of the company’s annual results and annual report. 

However, these substantial losses reflect a period that led to the arrest and detainment of Suncity’s former CEO Alvin Chau in January of this year.  

Chau was apprehended on charges of operating gambling-related activities in mainland China, where gambling is illegal. The firm also cites Covid-19 as continuing to detriment the overall business, particularly the impact of related travel suspensions.   

This has led to revenue decreases, which totalled HK$42.8M, compared with HK$123.8m in the year ended 31 December 2020. Other reductions to revenue are attributed to an increase in impairment loss on property, a decrease in the value of convertible bonds and an increase in impairment loss on loans.   

Moreover, the company has defaulted an unpaid loan awarded to GYE, together with accrued interest, which equates to approximately HK$272.6M.    

After failing to meet the due date (28 February 2022), GYE’s outstanding debt has been requested immediately. Suncity Group notes a similar bill is owed by the joint venture company GYE, to Alpha Era. Both Suncity and Alpha Era will continue to monitor the status of GYE’s unpaid loans.    

During the current climate, Suncity has advised its investors and shareholders to exercise caution when dealing in the securities of the company.   

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