Casino Junket Operator Jack Lam Offloads Controlling Stake In Jimei International
Last week Macau’s casino mogul and notorious junket investor Jack Lam sold off his controlling stake in Jimei International to Seychelles-based Cosmic Leader Holdings Limited. Lam was recognized in the brief released last week which outlined the sale of some 369,308,914 shares, amounting to a 65.04% stake in Jimei International. The purchase was completed for a total HK$443,170,696.80, or HK$1.20 per share.
The purchasing company has revealed that Jimei will continue operations as usual and remain listed on the Hong Kong Stock Exchange for the foreseeable future. In the filing, Cosmic Leader outlined that the board would investigate potential expansion of the acquired company, pledging to “conduct a review on the business operations and financial position of the group for the purpose of formulating business plans and strategies for the future business development.”
In addition to gaming and entertainment services, Jimei International also has considerable operations in chemical products, energy conservation, and environmental protection products. The Junket operations of Jimei continue to run in tandem with Australian gaming venues The Star in Sydney and Crown Perth in Western Australia.
Cosmic Leader has appointed Red Sun Capital as its financial adviser throughout the purchasing process, which completed at 09:00 April 20, Hong Kong time. Payments for the company will be completed in two stages, with the initial transaction amounting to HK$222,000,000 and 50.09% of Lam’s shares. The second payment will take place no later than January 5, 2018 and account for the remaining HK$221,170,696.
The sale of Lam’s shares comes following the latest annual Jimei earnings report, which revealed the junket firm had operated at a loss of HK$39.8 million last year.
Lam on the Lam
The gaming business magnate had been steadily distancing himself from gaming operations in other parts of Asia since allegations from President Rodrigo Duterte emerged last year accusing Lam of several offences in the Philippines. Duterte had ordered authorities to arrest Lam after over 1300 Chinese nationals were apprehended for working illegally at the Jimei-owned and operated Fontana Leisure Park and Casino in Pampanga.
Lam also stood accused of bribing officials, including Philippine Amusement and Gaming Corporation (PAGCOR) chairperson Andrea Domingo, to overlook the workers’ Visas while operations continued. Lam subsequently fled the Philippines, though he vehemently denied allegations brought against him.
President Duterte ordered all operations of Lam’s ceased and seized the businessman’s assets within the country under allegations of failing to pay the appropriate taxes. The president yielded that Lam could return and continue to operate gaming venues in the Philippines only after paying the alleged taxes and fines levied against him. The total sum of which amounted to $276 million. Lam had initially been granted a significantly reduced tax rate of 1% compared to the standard 10% imposed on other casino entertainment operators by former president Benino Aquino III.
Following a lengthy investigation conducted by the Philippines Senate, it was found Lam was more likely a victim of extortion than a perpetrator of the alleged crimes brought forth by the President and gaming regulatory officials.
Continued Operations in Macau
Lam won’t be stepping out of the game completely, as his privately held company, Jimei Group continues to operate junket activities in several Macau casinos, including Jimei Casino and the City of Dreams International Club.
Lam was contacted by the Macau Gaming Inspection and Coordination Bureau regarding clarification on his Philippines operations following local media reports. The Director of the DICJ, Paulo Martins, even went so far as to contact Philippines authorities regarding details of the charge against Lam. However, the Macau regulatory body found no conclusive evidence of the alleged crimes and allows Lam’s junket operations in the Macau entertainment district to continue unimpeded.
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