Suncity listco says Alvin Chau to step down as CEO, warns of potential funding gap

Hong Kong-listed Suncity Group Holdings has warned of potential adverse impact to the company’s operations and financial position after revealing its majority stakeholder Alvin Chau will stand down as CEO and director.

In a filing late Monday in which it also confirmed that a 47-year-old man named Chau arrested by Macau authorities over the weekend was indeed its CEO, Suncity revealed that Chau “has indicated his intention to resign from the posts of the chairman of the Board and an executive Director of the Company.”

But it also pointed to the financial support Chau has provided the group in recent times as crucial to fulfilling its ongoing development commitments in Vietnam, the Philippines and Russia. That support included agreeing in August 2020 to exchange existing shareholder loans worth HK$3.88 billion (US$500 million) for perpetual securities and a commitment to inject another HK$6 billion (US$775 million) in the form of additional perpetual securities.

Suncity said at the time that those additional funds would be used to finance Suncity’s integrated resort projects, including Hoiana in Vietnam, Russia’s Tigre de Cristal and its US$1 billion hotel and casino development at Westside City Resorts World in Manila.

Chau’s arrest by Macau authorities on Saturday came a day after China’s Wenzhou Public Security Bureau issued an arrest warrant of its own for the Suncity boss, accusing him of “opening casinos in China” via the operation of cross-border gambling operations on behalf of Suncity Gaming Promotion Company Limited (SCGPCL).

In Monday’s filing, Suncity noted that SCGPCL, which is wholly-owned by Chau, “is a key supplier of hotel accommodation products to the Group under its travel and related business segment,” with revenue from the sale of hotel accommodation products to SCGPCL in the 12 months to 30 June 2021 totalling RMB25.9 million (US$4.1 million), representing 17.4% of the total revenue of the group.

“In the event of any inability of SCGPCL to provide hotel accommodation products to the Group, and the Group is unable secure alternative supplies, the travel related businesses segment of the Group will be adversely affected,” Suncity said.

However, the company denied reports that Tigre de Cristal has been involved in cross border-gambling activities by sending officers to solicit customers in China for its gaming operations.

“The Board would like to clarify that such allegation is untrue,” it said. “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 added, “As at the date of this announcement, so far as the Board is aware, other than Mr Chau, neither the Company nor any of its subsidiaries nor any director, officer or staff of any member of the Group is under any investigation and/or charges in connection with the incident.”

The post Suncity listco says Alvin Chau to step down as CEO, warns of potential funding gap appeared first on IAG.

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