Alvin Chau announced that he was stepping down from his role as CEO of Suncity Group Holdings Limited in Macau. The billionaire made his announcement yesterday while sitting in a Macao jail on charges he ran a cross-border illegal gambling ring through his legal operations.
Chau Out at Suncity
Chau is facing multiple criminal charges in Macau as well as Wenzhou regarding the alleged orchestration of illegal cross-border gambling in Asia. Authorities in the Zhejiang Province assert that Chau’s wealth was partly derived from illicit online casino operations and illegally promoting gambling to Chinese residents.
Chau has stated his intent to resign as chairman of board and executive director of company, as well, according to a filing made by Suncity with the Hong Kong Stock Exchange.
Investors were also advised by the company about Chau’s departure. This raises serious questions regarding the group’s funding activities to continue its casino-resort developments throughout the Philippines, Russia and Vietnam.
“Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares,” the company stated. Suncity didn’t say when Chau might officially relinquish the other titles.
Suncity Faces Trouble As Stock Falls
Suncity’s warnings led investors to exit the company and sell off their shares. Suncity shares have lost more than 48% in value since Chau’s arrest at Macau.
Chau has been lending Suncity much of its financing for its under-construction integrated resorts in Russia’s Far East as well in the Philippines. Suncity is currently developing a $1-billion casino-resort complex in Westside City Resorts World. The company also continues to grow its Tigre de Cristal casino in Russia’s Vladivostok.
Chau will soon leave the company he founded in 2007 and served as its chief operating officer. The organization may be left without the capital necessary to continue its development projects.
Suncity Distances Itself from its Founder
According to the company’s filing with the exchange, “The Group is dependent on the financial support from Mr. Chau and his related companies. In the event that the Group losses the support of Mr. Chau for whatever reason, the financial position, business, and operation of the Group will be adversely affected.”
Suncity Group Holdings announced another important component. It says it had no ties to Chau’s accusations.
Prosecutors have charged Chau through his Sun City Gaming Promotion Company Limited (SCGPCL) with proxy betting in Wenzhou. However, this entity is not tied to Suncity Group, according to the company. It states that it does not have any control or influence over SCGPCL. Therefore, Suncity Group is free from legal liability regarding the Wenzhou allegations.
The board declared that, except for the possible interruption in financial support from him, Chau’s arrest does not have any “material adverse impact on the financial position, business, or operation” of the company.