HONG KONG, March 2, 2011 (AFP) – U.S. officials are probing casino operator Las Vegas Sands’ operations in the Asian gambling mecca of Macau over questions about whether it broke anti-bribery laws, the company confirmed Wednesday.
The criminal investigation – which comes after the sacked chief executive of Sands’ Macau unit filed a lawsuit in October saying he was told to conduct a illegal activities including spying on government officials – was revealed in its annual report.
Investors pounded subsidiary Sands Chinaâ€™s share price Wednesday, with the stock down about 7.5 percent at HK$17.62 ($2.26) in morning trade in Hong Kong.
The US-based gambling giant said it had received a subpoena from the U.S. Securities and Exchange Commission on February 9 requesting that it supply documents relating to its compliance with the Foreign Corrupt Practices Act. The law prohibits U.S. companies from bribing foreign officials.
The U.S. Justice Department was also â€œconducting a similar investigationâ€, said the company, which has shifted the focus of its business away from the stagnant U.S. market to the worldâ€™s biggest gambling hub.
Macau, the only city in China that allows casino gambling, saw about $23.5 billion wagered at its gaming tables last year, four times the Las Vegas Strip.
Less than two months after the lawsuit, Macauâ€™s vice squad conducted a sex-trade raid on Sandsâ€™ flagship Venetian hotel while officials turned down the companyâ€™s bid for a piece of land on the cityâ€™s lucrative Cotai Strip.
A spokeswoman for Sands China told AFP on Wednesday the firm would â€œassist with the investigationsâ€, while its parent companyâ€™s annual report said it intends to â€œvigorously defend this matterâ€.
The spokeswoman denied the allegations laid out in the wrongful termination claim filed in Nevada by former executive Steven Jacobs, while the company has previously called him a â€œdisgruntled former executiveâ€ who was sacked for good cause.
The annual report said the US probe â€œemanatedâ€ from the lawsuit, which claimed Sandsâ€™ billionaire founder Sheldon Adelson made â€œrepeated and outrageous demandsâ€ on Jacobs.
Those claims included arranging â€œsecret investigationsâ€ of Macau officials to use as leverage against negative policy decisions and threatening to withhold business from â€œprominent Chinese banksâ€ if they refused to use â€œinfluenceâ€ on senior government officials.
Jacobs also said he was forced to keep secret â€œtruthful and material informationâ€ from Sandsâ€™ board including allegations of the companyâ€™s ties to Macauâ€™s notorious triad gangs, long reputed to operate in the cityâ€™s casinos.
â€œWhen Jacobs objected to and/or refused to carry out Adelsonâ€™s illegal demands, Adelson repeatedly threatened to terminate Jacobsâ€™ employment,â€ the claim said.