Imperial Pacific Falls After Denying Reports Casino in Probe

  • Shares drop as much as 11 percent after voluntary halt
  • Company says it has never received U.S. investigation notice

Imperial Pacific International Holdings Ltd., the operator of a casino in the U.S. territory of Saipan, tumbled to an 18-month low as it resumed trading in Hong Kong after the company denied reports that its Best Sunshine gaming operation is being investigated by a U.S. regulator in charge of anti-money laundering efforts.

Bloomberg News reported Nov. 14 that the U.S. Treasury’s Financial Crimes Enforcement Network has taken notice of activities at Best Sunshine. Imperial Pacific never received any investigation notice from the U.S. Treasury unit, it said in a stock exchange statement late Tuesday that was in response to “certain media articles,” after requesting a trading halt earlier that day. Fincen, as the unit is known, is responsible for alerting prosecutors and other authorities of suspicious financial flows.

Imperial Pacific has implemented stringent internal control measures and has fully applied an anti-money laundering system to ensure compliance with all applicable U.S. laws and regulations, according to the exchange filing.

The stock fell 7 percent by the close of trading Wednesday to the lowest level since April 29, 2015, giving the company a market value of HK$16.9 billion ($2.2 billion). It slumped as much as 11 percent earlier.

Imperial Pacific reported daily revenue of about $170,000 for each of its 16 VIP tables in the first half of the year -- almost eight times the average of Macau’s largest casinos. In September, Imperial Pacific posted a record $3.9 billion in total bets at its casino -- meaning the 100 or so high-rollers who it says come through its doors monthly each wagered an average of $39 million.

Imperial Pacific says its casino, overall, is attracting visitors at full capacity.

"As there are only 38 gaming tables in the casino and each table is able to serve 5 to 6 customers at the same time, our service capacity has saturated,” Imperial Pacific said in its statement. “Each night, around 100 customers could not be arranged with a seat and had to queue or stand to participate."

Chief Executive Officer Mark Brown said in an interview this month that he believes that comparisons with Macau casinos reflect that Imperial Pacific’s peers are under-reporting figures, with off-books betting not showing up in official reports. Many gaming tables at Macau resorts are underused, which accounts for the high revenue from the limited tables in Saipan, according to Imperial Pacific.

The company’s board members include James Woolsey, who ran the Central Intelligence Agency in the early 1990s and was among national-security advisers to the White House campaign of President-elect Donald Trump, as well as Eugene Sullivan, formerly a senior U.S. military judge. A separate advisory committee for business strategies and government relations, formed in April, includes former Federal Bureau of Investigation director Louis Freeh and Ed Rendell, previously governor of Pennsylvania and chairman of the Democratic National Committee.

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