Hong Kong warns jailed gambling Kingpin’s former firms over Russia deal

Shares remain halted as the Securities and Futures Commission said they were concerned LET Group Holdings Ltd. and Summit Ascent Holdings Ltd. hadn’t complied with rules requiring shareholders’ approval of the deal, the regulator said in a statement Wednesday. The SFC asked both companies to address its concerns but hasn’t received a response, it said.

The completion of the asset sale may leave both LET and Summit Ascent without sufficient assets to warrant their continued listing in Hong Kong, it said. The SFC said it has serious concerns about the conduct of the companies and their management.

LET Group and Summit Ascent didn’t immediately respond to requests for comment from Bloomberg News. LET was formerly part of Chau’s gambling empire Suncity Group before it re-branded in 2022 with Andrew Lo at the helm, and the firm holds a nearly 70% stake in Summit Ascent. 

The SFC probe continues the long decline of what was once a leading player in the world’s biggest gambling hub. Chau and his Suncity Group ran Macau’s largest junket operator, heading a lucrative industry that attracted high rollers from mainland China with private jets, luxury suites and gambling credits. The sector crumbled after a crackdown by Beijing on concerns over capital outflows and potential money laundering and Chau is now serving 18 years in prison after being found guilty of criminal association, illicit gambling and fraud.

But even after LET cut ties with Chau, the firm has struggled. Before their suspension, shares were trading near a record low and the firm ceased its involvement in managing the Hoiana resort in Vietnam.

“The company’s business was hit by several negative factors simultaneously,” said Angela Hanlee, a senior gaming and hospitality analyst at Bloomberg Intelligence. “Issues associated with Alvin Chau made its parent company’s junket business evaporate. Covid dragged tourist foot flow to Hoiana in Vietnam, and the company lost direction of its business in Vladivostok due to sanctions related to the Russia-Ukraine conflict.”

Summit Ascent has also faced its own recent turmoil. A raft of executives’ resignations, citing disapproval about an unidentified transaction, has left Andrew Lo as the sole member of the company’s board.

The SFC didn’t disclose details on the asset that was sold beyond that it was indirectly held by Summit Ascent through a 77.5%-owned subsidiary. Industry publication GGRAsia previously reported that the sale was of the gaming license holder of the Tigre de Cristal casino in Russia’s east.