Suncity Plunges Up to 20% After Distancing From Junket Operation
Macau Confirms Closure of Suncity High-Roller Rooms in Casinos
(Bloomberg) -- Suncity Group Holdings Ltd. plunged as much as 20% as it resumed trading in Hong Kong on Thursday, continuing a selloff even after distancing itself from its former chairman’s junket operations in Macau.
The stock had a volatile start to the morning, swinging between falling and rising as much as 6% by 10 a.m. It was down 9.9% as of 10:14 a.m.
The group suspended trading on Wednesday after slumping 48% the previous day, the steepest drop since 2008. Alvin Chau, Suncity’s controlling shareholder, was detained last week over illegal gambling activities. He resigned as chairman and executive director effective Dec. 1, a step-down that’s in the best interest of the company and will also allow him to devote more time to personal matters, the group said in a statement Wednesday.
Suncity also clarified that the junket business -- which put Chau in authorities’ crosshairs -- has been operated by a firm wholly owned by Chau, rather than by the group.
The firm, the listed arm of Suncity Group, operates overseas casinos, hotel and mall consultancy and management, and real estate and travel services.
Macau’s gaming regulator confirmed on Wednesday that casinos in the gambling hub had closed high-roller gaming rooms operated by Suncity Group. The casinos told Macau’s Gaming Inspection and Coordination Bureau that Suncity VIP rooms were suspended from Dec. 1, ending cooperation with the junket operator, the bureau said in a statement. Casinos and junkets in the Chinese territory must comply with the law, the regulator said.
The statement follows reports Wednesday -- including by Bloomberg News -- that Suncity, the biggest junket operator in Macau, was closing all its VIP rooms in casinos there and no longer paying some staff.
| Read more on Suncity |
|---|
| Macau Junket Giant Suncity Halts Operations After CEO Arrest |
| Junket King’s Arrest Spurs Selloff as Key Macau Market Targeted |
| Suncity Chairman Chau Resigns, Company to Resume Trading |
| Junket King’s Arrest in Macau Signals End of $2.2 Billion Market |
The arrest of Chau, one of the highest-profile figures in Macau’s gambling world, has smashed Suncity shares, and sent shockwaves through an industry already under siege from growing government intervention.
Even before his detention, casinos in Macau were reeling from proposed law changes aimed at bolstering oversight of the sector, which less than three months ago wiped $18 billion off gaming stocks.
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