Australia-listed gaming operator Silver Heritage Group Ltd says all casino operations at the Phoenix International Club (pictured) near Hanoi in Vietnam “have ceased” with effect from Friday morning.
“The company received notice from the general manager of Phoenix that table games are no longer included in its revised investment certificate and hence not permitted to be operated on the property, and that the casino will close for an indefinite period,” Silver Heritage said in a Friday filing to the Australian Securities Exchange.
According to the filing, the casino operations at Phoenix represented approximately 45 percent of Silver Heritage’s unaudited revenue for the year ended December 31, 2018.
“The board is conducting a review of the legal basis on which the notice was issued, the company’s rights and obligations under the entertainment services agreement between the company and the owner of Phoenix, and the impact … on the company,” said Silver Heritage.
The company had on Wednesday voluntarily requested, and been granted, a suspension in the trading of its stock.
Silver Heritage had previously flagged that revenue from its casino operations at Phoenix were “below budget expectations”. The firm told the exchange in January that the weakness of the trading performance of its casino at Phoenix had continued in the fourth quarter and was persisting in the first month of 2019.
The group said at the time that it had “renegotiated and amended” its agreement in respect of Phoenix, and that it expected “earnings to improve over the coming months”.
Silver Heritage also operates the purpose-built flagship casino property Tiger Palace Resort Bhairahawa and manages a gaming operation at a hotel in the Nepal capital Kathmandu.
In Friday’s filing, the company said also that it had recently “discovered accounting irregularities” in its operations in Nepal.
“Limited investigations to date indicate the issue relates to the accounting treatment and specifically the method used to change the treatment of a previously written off amount in an attempt to re-classify the expense at a local subsidiary level,” Silver Heritage explained.
“The irregularities are predominantly non-cash in nature and the cash cost to the business is approximately US$15,000,” it added.
The boutique casino operator reported in September a financial first-half loss – after providing for income tax and non-controlling interest – of just under US$9.94 million, compared to US$3.52 million in the prior-year period. Phoenix International’s first-half revenue amounted to just under US$5.93 million, the firm said at the time.
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