Macau gambling group Suncity’s shares plunge after CEO arrested
HONG KONG – Shares of Macau gambling group Suncity Group Holdings Ltd slumped 40% in resumed trade on Tuesday after its CEO was arrested over alleged links to cross-border gambling. The company said he intends to resign.
Alvin Chau, also the founder of Macau’s biggest junket operator which brings in high rollers to play at casinos, was arrested by Macau police on Sunday and is the subject of an arrest warrant in mainland China – where all forms of gambling are illegal.
Macau authorities arrested Chau and 10 others, accusing them of using the world’s largest gambling hub as a base for an illegal “live web betting platform” in the Philippines that attracted mainland Chinese.
Authorities in the eastern Chinese city of Wenzhou have separately accused Chau of forming a junket agent network that helps citizens engage in offshore and cross-border gambling activities as well as setting up an asset management company that helps gamblers make cross-border fund transfers.
Cross-border flows of money due to gambling has long irked the Chinese government and Macau authorities said their investigation has been in train for two years.
That coincides roughly with the time that Suncity came under attack in China’s state media which criticised online gaming activities for causing what it described as great harm to China’s social economic order. Suncity said at the time it did not operate any online gaming.
Miao Shengming, an official with China’s top prosecutorial agency, said on Monday that some overseas casinos and online gambling websites primarily target mainland clients, harming China’s “economic security.”
“Out of those that go overseas to gamble, some bet enormous amounts, causing a huge outflow of funds,” Miao said.
Between 2018 and September this year, 255,850 people have been prosecuted in China for gambling offences, of which 63,238 were charged between January and September, he added.
Suncity’s stock was down 39.6% as of the midday session, valuing it at HK$1.03 billion ($132 million) and at one point fell 48% to a record low of HK$0.133.
Part of the Macau investigation involves Russia’s Tigre de Cristal resort which is close to China’s northeast border and is controlled by Hong Kong-listed Summit Ascent Holdings, of which Suncity is the controlling shareholder.
Shares of Summit Ascent slid 53.8%.
Suncity Group said in a statement late on Monday that allegations in the media that Tigre de Cristal was involved in cross-border gaming by soliciting customers in mainland China was untrue.
Suncity Group’s operations would not be impacted in the event that it ceased to have Chau’s support, it added. – Reuters