GGRAsia – Macau ex-advisor Green tells court when LVS tied to Galaxy

Macau ex-advisor Green tells court when LVS tied to Galaxy

Oct 08, 2021 Newsdesk Latest News, Macau, Top of the deck

The casino operations experience of Las Vegas Sands Corp (LVS) had significant weight when the Macau government was assessing bids for gaming concession rights nearly 20 years ago, a Macau court was told on Friday by David Green, part of a consulting team from accountancy firm Arthur Andersen LLC, hired by the city’s government to advise on casino-market liberalisation.

Mr Green was speaking as a witness in a Macau civil case on whether the claimant, Asian American Entertainment Corp (AAEC), is entitled to the equivalent of US$12-billion compensation because of the role it claimed to have in Las Vegas Sands getting a Macau casino licence at the turn of the century.

At an earlier stage of the tender process, units of Las Vegas Sands had teamed up with Asian American Entertainment for the Macau venture; but later the United States-based group switched to a partnership with Hong Kong entrepreneur Lui Che Woo, via an entity called Galaxy Casino SA.

The bids by Galaxy Casino and Asian American Entertainment might respectively have been ranked with the same score by the Arthur Andersen team, if Las Vegas Sands had not participated with either of them in the Macau process, said Mr Green. He was replying to questions from respectively the case judge, Seng Ioi Man, and lawyer Luís Cavaleiro de Ferreira, from CFS – Luís Cavaleiro de Ferreira, Ricardo Silva & Associados. The latter firm is representing case defendant Las Vegas Sands and its units.

Mr Green said the Arthur Andersen team was also asked to evaluate bidders’ experience in running “ancillary services”, such as hotel operations and entertainment. The assessors also looked at the “corporate history” and “personal history” of the participating bidders and their respective directors.

“Three or four days” before Mr Green and his colleagues were scheduled to complete the ranking process for bidders, ties between Asian American Entertainment and Las Vegas Sands were cut, said Mr Green.

Since Las Vegas Sands was no longer a partner of Asian American Entertainment in the bidding process, Mr Green said his company was “instructed to take Las Vegas Sands out” of the syndicate arrangement it shared with Asian American Entertainment, “and include” Las Vegas Sands “in the scoring of the Galaxy syndicate,” its new partner in the process.

‘Verbal’ instruction

The communication was given “verbally” by Jorge Oliveira and Manuel Neves – members at the time, of the Macau commission dealing with the casino tender – via a “visit to the work space” in Macau of the Arthur Andersen team, Mr Green said.

Mr Neves was from 1997 until 2015, head of the city’s casino regulator, the Gaming Inspection and Coordination Bureau, a body also known as DICJ. Mr Neves also gave evidence in the case earlier this year.

Mr Green said in his Friday evidence, the verbal instruction on the Las Vegas Sands and Galaxy Casino tie up “was also authorised” by the then- Secretary for Economy and Finance, Francis Tam Pak Yuen. Mr Green added he did not recall whether his team had, at the time, been provided with any “documents” on the new partnership Las Vegas Sands formed for the casino bidding process.

Las Vegas Sands’ tie up with Galaxy Casino had resulted in “uplift” to that resulting bid, because of the former’s casino gaming experience, Mr Green said.

“To my recollection, Galaxy had no verified gaming experience,” Mr Green told the Friday session. He explained that one of Galaxy Casino’s directors had claimed gaming experience “through a Macau family”, and stated such information in a credit rating report.

But that report had “no declaration of truth”, Mr Green said. He added: “That was also inconsistent with the personal history disclosure [submitted by Galaxy Casino SA]…as [according to the disclosure] the director had no job any time in the gaming industry.”

The Arthur Andersen team’s ranking did not take into account the Galaxy Casino side’s association with building and operating hotels via the Lui family’s construction interests, as the hotels already created were not any “ancillary” services to casino gaming, Mr Green told the Macau court.

The Macau commission handling the casino tender process received Arthur Andersen’s bidder-ranking report on February 5, 2002, said Mr Green. The commission eventually made its own adjustments in those rankings, raising the scores of some of the bidding contestants, including Galaxy Casino; Sociedade de Jogos de Macau SA (SJM), and Wynn Resorts Ltd, and announced its finalised ranking results on February 8 that year, Mr Green added.

The case, which started in June, continues.