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HONG KONG (Reuters) - Shares of Macau gambling group Suncity Group Holdings Ltd lost nearly half their value in resumed trade on Tuesday after its CEO was arrested. The company said he intends to resign.
Alvin Chau, also the founder of Suncity - a junket operator that brings in high rollers to play at casinos, extending them credit and collecting on their debts - was arrested by Macau police on Sunday over alleged links to cross-border gambling.
Suncity’s stock slid as much as 48% to a record low of HK$0.133, valuing it at roughly HK$886 million ($114 million) after Chau and 10 others were arrested in Macau.
Authorities in Wenzhou, a city in eastern China, have also issued an arrest warrant for Chau, accusing him of operating gambling activities in mainland China where gambling is illegal.
Part of the Macau investigation involves Russia’s Tigre de Cristal resort which is close to China’s northeast border and is controlled by Hong Kong-listed Summit Ascent Holdings, of which Suncity is the controlling shareholder.
Shares of Summit Ascent slid more than 50%.
Suncity Group said in a statement late on Monday that allegations in the media that Tigre de Cristal was involved in cross-border gaming by soliciting customers in mainland China was untrue.
Suncity Group’s operations would not be impacted in the event that it ceased to have Chau’s support, it added.
Macau’s prosecutor’s office said in a statement on Monday the group was also suspected to have used the world’s largest gambling hub as a base for an illegal “live web betting platform” in the Philippines that attracted mainland Chinese.
($1 = 7.7984 Hong Kong dollars)
Reporting by Eduardo Baptista and Donny Kwok; Writing by Anne Marie Roantree; Editing by Stephen Coates and Edwina Gibbs
