GGRAsia – Unit of Hong Kong firm summonsed over Jeju slots deal

Unit of Hong Kong firm summonsed over Jeju slots deal

Jun 07, 2016 Newsdesk Latest News, Rest of Asia, Top of the deck

A unit of New Silkroad Culturaltainment Ltd has received a summons from Jeju District Court in South Korea “due to an indictment brought by Jeju District Prosecutor Office for outsourcing management of slot machines… allegedly in violation of the Tourism Promotion Act,” said a filing from the parent firm to the Hong Kong Stock Exchange on Monday.

Jeju is a semi-autonomous island off the coast of South Korea that offers visa-free entry to mainland Chinese tourists that travel there directly. Jeju has a number of casino resorts and several new ones are planned by overseas investors.

The legal action by Jeju authorities mentioned in Monday’s filing is against Development Golden Beach Co Ltd – a South Korean firm 72-percent owned by New Silkroad Culturaltainment – in relation to a slot machine leasing agreement with a firm called Global Game Co Ltd.

“Immediately after receipt of the notification of the indictment from Golden Beach, the company has engaged its Korean lawyers to investigate into the indictment and prepare for the defence,” said the parent firm in its filing.

“After making preliminary assessment, the board considers that the indictment would not have a material adverse impact on the business and operation of Golden Beach,” added the parent company, stating it would keep its shareholders and potential investors informed of any further developments.

In May Melco International Development Ltd, a firm led by casino entrepreneur Lawrence Ho Yau Lung, announced one of its units would provide consultancy services to a casino that is “to be developed” over a period of three years in Jeju.

Under the deal, a Melco International unit called Melco Gaming Assets Management (Korea) Ltd will advise a firm called New Silkroad Korea Development Ltd.

The May filing by Melco International said New Silkroad Korea is a wholly-owned subsidiary of Hong Kong-listed New Silkroad Culturaltainment.