Caixin
Nov 29, 2018 08:39 AM
FINANCE

Missing Casino Tycoon Returns After Investigation

Chairman of Hong Kong-listed casino operator Landing International Development, Yang Zhuhui. Photo: IC
Chairman of Hong Kong-listed casino operator Landing International Development, Yang Zhuhui. Photo: IC

Yang Zhihui, the chairman of Hong Kong-listed casino operator Landing International Development Ltd. who disappeared for three months, has returned and “resumed his duties,” Landing International said.

Yang was absent since Aug. 23 to assist Chinese authorities in an investigation, Landing said in a filing with the Hong Kong stock exchange earlier this week. On Aug. 23, the company reported that Yang was “out of contact or reach” and confirmed on Oct. 2 that it was still unable to reach Yang.

Caixin reported in August that the investigation was related to the scandal-ridden bad asset giant China Huarong Asset Management Co. Ltd., whose former chief was under investigation for graft. Landing didn’t provide details about the investigation.

Caixin learned that Yang had been detained in Cambodia and was being investigated by Chinese authorities over suspicious business ties with Huarong.

In early October, Hong Kong-based shareholder activist and veteran investment banker David Webb on his website linked an unidentified person probed by the Hong Kong Securities and Futures Commission to Yang.

The SFC in September said it ordered three brokers to freeze assets of as much as HK$10.17 billion ($1.3 billion) owned by an unnamed chairman of a public company. The assets were to be frozen pending a probe into possible fraud in which the chairman colluded with certain executives from a group to pull off two deals that might have lost the group HK$10.17 billion.

The SFC’s statement didn’t name any individual or company. Webb said on his website that the individual was likely to be Yang and the money-losing group was likely to be Huarong.

Huarong came under the spotlight after its former chairman and Communist Party chief, Lai Xiaomin, was investigated and removed in April for “serious violation of rules and the law.” Lai reportedly had three metric tons of cash stashed at home and a 300 million yuan ($43.4 million) bank account under his mother’s name.

Yang, 47, ran a property business on the mainland. He later expanded his business to Hong Kong and casino projects. In 2013, Landing International listed on the Hong Kong main board by acquiring a shell company. Yang currently owns 50.48% of Landing International.

Caixin learned that Yang had close business ties with Huarong’s former general manager, Bai Tianhui. Bai was also chairman of Hong Kong-listed Pacific Plywood Holdings Ltd, which is 55% owned by Huarong. Bai was placed under investigation in June along with several other executives in relation to the Lai case.

Landing International won its first gambling license in 2014 when it acquired a company named Ultra Matrix International Ltd. for HK$876 million. Ultra Matrix operates a casino in the Hyatt Regency in South Korea’s Jeju Island.

In 2015, Landing International extend its reach to Europe, acquiring London’s Les Ambassadeurs Club, an exclusive gaming club, for HK$1,644 million, only to sell it a year later to Hong Kong-based Paul Suen Cho-hung, known as the “shell king” for his previous investment record.

In August, Landing International obtained a gambling license in the Philippines and started developing resorts there days before Yang’s disappearance.

Company records show that Landing International in 2017 raised HK$5,063 million through a rights issue and HK$1,791 million through a share placement to repay debt and develop the Jeju resort project. In 2014 and 2015, the company raised nearly HK$8 billion through two rights issues.

Landing International’s revenue during the first six months of 2018 more than quadrupled from a year ago to HK$1.75 billion, and its profit rose nearly six-fold to HK$281 million. Yang said the financial performance was boosted by the company's casino revenue of HK$1.4 billion, up 10-fold from a year ago.

The company’s stock has been on a roller coaster this year. The share price of Landing International rose to HK$20 in early March before tumbling to a low of HK$4.62. In less than 10 days, it then rebounded to HK$11. After Yang was announced as missing, Landing International fell more than 30% to HK$1.55 a share.

The closing price of Landing International Monday was HK$2.73, up 8.8%.

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