GGRAsia – Adelson faces ex-Macau CEO Jacobs’ claims in court

Adelson faces ex-Macau CEO Jacobs’ claims in court

Apr 20, 2015 Newsdesk Latest News, Macau, Top of the deck

Sheldon Adelson, chairman and chief executive of Macau casino operator Sands China Ltd, has been called to give evidence in person in a U.S. District Court hearing in Nevada linked to the dismissal of Steve Jacobs, a former CEO of the Macau unit, reports Bloomberg News, citing court filings.

The Bloomberg report said the hearing is due to begin on Monday. It didn’t state precisely when Mr Adelson – who is also chairman and CEO of the Sands China’s parent Las Vegas Sands Corp – is expected to attend court.

One of the most potentially sensitive aspects of the legal battle between the two men – Mr Jacobs’ claim to hold a copy of a confidential dossier into the activities of Macau government officials that were in post in the period prior to his dismissal in July 2010; a report he says was ordered by Mr Adelson – is admissible as evidence, but cannot be disclosed to the public at this particular hearing, a judge had earlier ruled.

Mr Jacobs was dismissed from his post for what the firm said was “cause”, including an allegation of unauthorised deal making, which the former Sands China boss has denied.

In October 2010, Mr Jacobs sued Las Vegas Sands and Sands China in Nevada making allegations including breach of contract and breach of good faith. Aspects of the case have dragged since then. One key sticking point is whether the Nevada court can even hear Mr Jacobs’ claims.

The hearing that is said to start on Monday will address the narrow legal question of whether Sands China, which is incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, can be sued in Nevada.

According to previous court filings, Mr Jacobs’ wider goal is to recover his reputation and the right to 2.5 million Sands China stock options he says are still owed to him.

Las Vegas Sands said in a January court filing that Mr Jacobs is using the lawsuit as a “platform to denigrate and defame” the company and its chairman.

Mr Jacobs has sought to support his case with a copy of what he says is the confidential investigation into Macau officials. Mr Adelson denies commissioning the report and claims it was Mr Jacobs’ idea and that he, the chairman, only found out about it after the executive was dismissed.

On January 6 this year, Elizabeth Gonzalez – the U.S. District Court judge in Nevada due to hear the wrongful dismissal lawsuit and the jurisdiction issue – ruled that the reported investigation into Macau government officials could be used in legal arguments relating to Mr Jacobs’ wrongful termination action, but must not be made public.

In March, Judge Gonzalez ordered Sands China to pay a US$250,000 penalty to legal charities after ruling the firm improperly withheld Macau documents relating to Mr Jacobs’ wrongful termination suit. She also said the firm wouldn’t be able to bring any witnesses in the jurisdictional hearing. Earlier this month, the Nevada Supreme Court offered Sands China a temporary reprieve from the US$250,000 penalty but the senior bench did not interfere with the other sanctions imposed in the case.

In 2013, a District Court jury in Nevada awarded Hong Kong businessman Richard Suen US$101.6 million after he successfully argued he had played a key role in Las Vegas Sands getting its Macau gaming licence. Las Vegas Sands has appealed against the decision.

Sands China’s current Macau licence is due to expire in the year 2022.