Macau-linked Saipan casino bid ‘illegal’
Agents of a company linked to Macau junket investor First Natural Foods Holdings Ltd have been accused of “illegally” providing benefits to at least four local lawmakers in the U.S. commonwealth of the Northern Mariana Islands to win their support for passage of a casino law.
The claims have been made in a lawsuit by Marianas Stars Entertainment Inc – First Natural’s rival for a casino licence on the Pacific island chain. The local government is seeking to develop the economy via gambling tourism.
On Thursday Marianas Stars was granted a temporary restraining order by a Superior Court Associate Judge sitting in Saipan (pictured), the largest island in archipelago, and the place where a casino resort – described by the local government as requiring a “minimum US$2 billion” investment – would be located.
The court order lasts until June 29 and prevents Governor Eloy S. Inos, the CNMI government, the jurisdiction’s Commonwealth Lottery Commission – the licensor for any casino approval – and the finance secretary, from either denying or approving a casino licence.
The suit alleges that the other Saipan casino bidder – Best Sunshine International Ltd – was involved in illegal practices. According to a regulatory filing by First Natural Foods to the Hong Kong Stock Exchange on May 7, Best Sunshine is a British Virgin Islands firm wholly owned by First Natural.
A copy of Marianas Stars’ court petition has been obtained by GGRAsia. It states: “The Lottery Commission members are well aware of the significant evidence that indicates that in order to force the passage of the Casino Law, agents of people from Hong Kong and Macau who wanted a Saipan casino licence, improperly and illegally provided significant benefits to at least four CNMI senators in order to cause them to support passage of the Casino Law. Yet, the Lottery Commission refuses to investigate Best Sunshine and its principals and agents in order to determine whether such allegations are true and whether Best Sunshine or persons affiliated with its team are responsible.”
The court filing adds that Best Sunshine “was apparently preordained to have the casino licence issued to it even before the Casino Law was passed”.
Both bidders were required to pay a US$1 million non-refundable application fee as part of the process. Each was also required to pay US$30 million as a refundable deposit into a government escrow account.
GGRAsia attempted to contact representatives of First Natural prior to publication of our story, but was unsuccessful.
On Friday morning prior to market opening, First Natural announced that trade in its shares was being suspended. Later in the morning the firm said the reason was “pending the release of an announcement in relation to inside information of the company regarding the application for the Casino Resort Developer Licence for the Island of Saipan”.
Prior to suspension, its shares were valued at 57 HK cents (0.74 US cents). The firm currently has a market capitalisation of HK$4.56 billion.
In November last year First Natural announced in a filing it wanted to acquire a 5-percent share in the profit stream of Macau casino VIP room investor Hengsheng Group Ltd for HK$400 million in the form a convertible note. The deal – with the note at zero coupon – was confirmed to the Hong Kong Stock Exchange on March 19.
The shareholders of First Natural approved on May 20 a company change of name to Imperial Pacific International Holdings Ltd. The firm’s Chinese name has been changed to that, but it still trades on the English-language listings as First Natural.
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