Sands' shares slide after news of US probes

08:55, March 03, 2011      

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Sands China Ltd fell the most in more than a year in Hong Kong trading after its majority shareholder, billionaire Sheldon Adelson's casino company, said it faced investigations from the US Securities and Exchange Commission (SEC) and the Justice Department.

Sands China tumbled as much as 9.7 percent to HK$17.20 ($2.21), the biggest intraday decline since Nov 30, 2009, and traded at HK$17.86 at the 4 pm close on Wednesday in Hong Kong. The benchmark Hang Seng Index fell 1.49 percent.

Adelson's Las Vegas Sands Corp, the parent of the Macao casino operator, said on Tuesday it received a subpoena from the SEC to produce documents relating to its Macao operations' compliance with the Foreign Corrupt Practices Act (FCPA). The US Justice Department is conducting a similar investigation, the Las Vegas-based company said in a regulatory filing. Ron Reese, a spokesman for Las Vegas Sands, described the contact by the authorities as "making fact-finding inquiries".

"News of the investigation is clearly negative," said Aaron Fischer, a Hong Kong-based analyst at CLSA Ltd. The probe is unlikely to have a major impact on Sands China's earnings in the short term, he said.

The FCPA prohibits US companies and their intermediaries from making improper payments to foreign officials to win or retain business. Sands China said in July that Chief Executive Officer Steven Jacobs was fired by the board, without specifying reasons. Jacobs sued his former employer in October in a Nevada state court, alleging breach of contract.

"It is the company's belief that the subpoena emanated from allegations contained in the lawsuit filed by Steven C. Jacobs," according to the Las Vegas Sands filing.

Jacobs' complaint alleges, among other things, that Las Vegas Sands demanded that he use improper "leverage" to win government concessions, that he retain a lawyer who was part of the Macao government and that he mislead the board.

Las Vegas Sands, which owns a 70.3 percent stake of Sands China, according to data compiled by Bloomberg, fell 6.3 percent to $43.70 in New York Stock Exchange composite trading on Tuesday.

Source: China Daily/Agencies
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