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Best of Liz Benston

Gaming Guru

Liz Benston
 

Venetian Owner Faces New Suit Over Macau Casino

17 November 2004

The owner of the Venetian is facing another lawsuit related to the company's lucrative casino in the Chinese enclave of Macau.

Last month, Hong Kong businessman Richard Suen sued Las Vegas Sands Inc., Chief Executive Sheldon Adelson and President William Weidner in Clark County District Court for breach of contract.

In his suit, Suen claims he notified Las Vegas Sands officials in 2000 about the Macau government's intentions to grant new casino licenses through a competitive bid process.

Around September 2001, Suen and his Hong Kong company, Round Square Co. Ltd., accepted a written offer from the Sands to receive a $5 million "success fee" upon opening of a resort and 2 percent ownership of the Sands' share of the resort's net profit, the suit said. Suen is seeking more than $100 million in damages based on the Sands Macau's earnings so far.

Suen and his company introduced Sands executives to government officials and other influential people, advised the company on preparing their bid, analyzed strategies for selecting investment partners and advised the company on compliance procedures in China and Macau, among other things, the suit said. That assistance was a "substantial factor" in the Sands' winning bid, it said.

In its third quarter financial statement filed with the Securities and Exchange Commission Monday, Las Vegas Sands said it would "vigorously" contest the suit in court.

Last December, an Israeli tourism entrepreneur filed a breach of contract suit in Tel Aviv against Adelson. In the suit, Moshe Hananel accuses the casino boss and his Interface Partners International Ltd. subsidiary of violating an agreement to grant Hananel options for 12 percent of Adelson's holdings in his Macau project. The suit said the options were granted in exchange for drafting the licensing plan. Hananel said his work on the Macau development "gave Mr. Adelson a huge advantage over other entrepreneurs who saw the opportunity at a later stage."

Adelson countersued, accusing Hananel of misappropriating funds while working at Interface.

Hananel could not be reached for comment to determine the status of their claims and Sands Chief Financial Officer Scott Henry declined comment, citing an SEC-imposed "quiet period" while the company awaits an initial public offering of stock.

In 2002, the Macau government ended a decades-old casino monopoly in the former Portuguese colony by granting casino licenses to Galaxy Casino Co. Ltd. and Adelson rival Steve Wynn. The Las Vegas Sands opened its Sands Macau casino in May under a subconcession agreement with Galaxy and also plans to open a Macau version of its Venetian resort in 2007. Wynn's Wynn Macau subsidiary is developing a resort in the province and MGM Mirage, in a joint venture with Macau casino boss Stanley Ho's daughter, also plans a resort there.

Separately, the company disclosed a separate lawsuit filed by Bear Stearns Funding Inc. against Interface Nevada, a Las Vegas Sands subsidiary. Bear Stearns seeks damages of $1.5 million, plus interest and costs, over an alleged breach of contract in connection with a $141 million mortgage loan that was paid off in July. Interface Nevada has asserted six counterclaims against Bear Stearns "in an amount to be determined at trial." Officials with the Bear Stearns investment bank and Las Vegas Sands could not be reached for further information on the suit.