GGRAsia – Junket veteran Jack Lam sells control of Jimei International

Junket veteran Jack Lam sells control of Jimei International

Apr 20, 2017 Newsdesk Latest News, Rest of Asia, Top of the deck

Jack Lam Yin Lok (pictured), a veteran investor in Macau junkets, has sold a 65.05-percent stake in Jimei International Entertainment Group Ltd, a Hong Kong-listed junket investment entity, the firm announced in a Wednesday filing.

The deal took place on April 7 and involves a maximum consideration of HKD443.2 million (US$57.0 million), divided into two batches. The first, amounting to HKD222 million, was already settled, according to the filing. The second batch – amounting to HKD221.2 million – is to be paid on January 5, 2018: the amount might be adjusted downward if Jimei International is unable to recover part of its outstanding receivables, valued at HKD227.0 million at the end of 2016.

The seller is identified in Jimei International’s filing as Reach Luck International Ltd, a company fully owned by Mr Lam. Reach Luck sold its entire stake in the junket investor. The document however did not clarify if Mr Lam would keep any shareholding in Jimei International following the deal.

The buyer is identified in the document as Cosmic Leader Holdings Ltd, a company incorporated in the Seychelles three months ago.

The filing added that Cosmic Leader is owned by Yan Xu – with an 80-percent interest in the company – and Chen Hong, who controls the remaining 20 percent, and who already had a stake of 0.04 percent in Jimei International.

It added that Mr Lam and the owners of Cosmic Leader were introduced by an executive director of Jimei International, Chau Chit, who holds an 8.8-percent interest in the junket investor.

Mr Yan, aged 48, is said to have 20 years of experience in property development in China and “extensive experience in the entertainment business through investment in various companies, and financing films”.

Ms Chen, aged 46, is said to be an “experienced investor” in China with investments covering technology and telecommunication sectors.

The Jimei International filing added that Cosmic Leader planned to maintain Jimei International’s listing on the Hong Kong Stock Exchange. The document stated the new controlling shareholder intended Jimei International to “continue its existing businesses”: Jimei International has junket arrangements with two casino properties in Australia, namely The Star in Sydney and Crown Perth in Western Australia.

Cosmic Leader would also “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” of Jimei International, the filing said.

Following the announcement of the deal, Jimei International’s shares resumed trading on Thursday. Trading had been suspended since April 7.

Jimei International reported in March a loss of HKD39.8 million for full 2016, compared to a profit of approximately HKD8.7 million in 2015.

The firm was the Hong Kong-listed portion of Mr Lam’s business interests.

He is also involved – via a privately held business called Jimei Group – in junket operations at City of Dreams Macau, according to Jimei Group’s website. The group also runs Jimei Casino next door to the Grand Lapa hotel on Macau peninsula under an SJM Holdings Ltd gaming licence.

Jimei Group operated until recently the Fontana Casino at the Fontana Hot Spring Leisure Parks at Clark Freeport Zone on the main island of Luzon, and Fort Ilocandia Hotel and Casino in Laoag City in northern of Luzon.

The Philippines’ President Rodrigo Duterte had ordered in December the seizure of all gaming assets in that country belonging to Mr Lam for the latter’s alleged failure to pay the correct taxes, local media reported at the time. Prior to that, Mr Duterte had ordered the arrest of Mr Lam on accusations of bribery and economic sabotage.

The arrest order against Jimei Group’s Mr Lam was issued just a few days after 1,316 Chinese nationals were detained at premises linked to the Fontana Hot Spring Leisure Parks at Clark.

Last month, a Philippine Senate committee concluded Mr Lam had been a victim of “extortion” from officials from the country’s Bureau of Immigration rather than an instigator of “bribery”.

Mr Lam is not known to have issued any public statement or made any public appearance since the late November raids at his Fontana premises. Mr Lam, a Chinese national, reportedly left the Philippines on November 29.