Suncity Group Holdings Limited chairman and executive director Alvin Chau is stepping down from his top roles at the investment holding company. The news came after the junket mogul was arrested in Macau over alleged money laundering and illegal cross-border gambling accusations.
Suncity Group, which was suspended from the Hong Kong Stock Exchange on Monday morning, is now looking to distance itself from the allegations of corrupt practice. The business has also made a formal request to resume its trading operations.
Alvin Chau Cheok Wa is currently remanded in custody in Coloane prison, according to local media. He has indicated he will resign as chairman of the board and executive director in a statement issued yesterday. Chau was arrested along with other 10 people as part of a major crackdown on “illegal gambling.”
In its statement, Suncity Holdings’ board noted the allegations against Chau, but stressed that its operations at the Russian casino resort Tigre de Cristal, which is controlled by Summit Ascent Holdings Limited, a subsidiary of Suncity Group, were entirely above board, reports Macao News.
The board noted in its statement that Chau has been accused of being involved in “illegal cross border gambling activities,” and that his subsequent arrest and detainment by the Macau Judicial Police was carried out on the basis of Chau allegedly being involved “in illegal gaming and money laundering.”
The integrated resort Tigre de Cristal, located at the Integrated Entertainment Zone of the Primorye Region in the Russian Federation and whose 77.5% is indirectly held by Summit Ascent Holdings, has been accused of being involved in cross border gambling “by sending officers to solicit for customers” in China for its gaming operations.
“As to the allegation regarding the involvement of Tigre de Cristal in cross-border gambling activities, the board would like to clarify that such allegation is untrue,” the company’s statement reads. “None of the directors, officers or staff of any members of the Group has engaged in the solicitation for customers in the PRC for the gaming operations of Tigre de Cristal.”
Suncity Holdings’ board further added that the resort was running as usual and that recent events were not expected to have any adverse effects. The statement, however, notes that “the group is dependent on the financial support from Chau and his related companies,” and that in the event the group loses his support, “the financial position, business and operation of the group will be adversely affected.”
The company’s statement ends with an instruction to shareholders and investors to exercise caution when dealing with the shares. News of the 11 arrests made Macau’s casino industry take a hit yesterday, with some of the city’s biggest operators facing drops in their shares: MGM China was down 10%, Wynn Macau was down 8%, and Sands China was down 6%.
Chau’s arrest marks the first time a prominent individual in the Chinese gaming business has been targeted. On top of chairing Suncity Group Holdings, Chau is also the founder of Suncity Gaming Promotion Company Limited, Macau’s biggest junket operator, which organizes trips to Asian casinos for VIP gamblers.
The other 10 suspects have been reported as being either Macau or Hong Kong residents, some of them senior executives of companies. Chau and four others are currently being held in pre-trial detention after being formally charged by the Macau Public Prosecutions Office.
Suncity Group has said that, as far as the board is aware of, apart from Chau “neither the company nor any of its subsidiaries nor any director, officer or staff or any member of the group” is under investigation or charges in connection with the incident, reports Macau Business.