U.S. probes Las Vegas Sands over bribery claims

HONG KONG, March 2, 2011 (AFP) – U.S. officials are probing casino operator Las Vegas Sands’ operations in the Asian gambling mecca of Macau over questions about whether it broke anti-bribery laws, the company confirmed Wednesday.

The criminal investigation – which comes after the sacked chief executive of Sands’ Macau unit filed a lawsuit in October saying he was told to conduct a illegal activities including spying on government officials – was revealed in its annual report.

Investors pounded subsidiary Sands China’s share price Wednesday, with the stock down about 7.5 percent at HK$17.62 ($2.26) in morning trade in Hong Kong.

The US-based gambling giant said it had received a subpoena from the U.S. Securities and Exchange Commission on February 9 requesting that it supply documents relating to its compliance with the Foreign Corrupt Practices Act. The law prohibits U.S. companies from bribing foreign officials.

The U.S. Justice Department was also “conducting a similar investigation”, said the company, which has shifted the focus of its business away from the stagnant U.S. market to the world’s biggest gambling hub.

Macau, the only city in China that allows casino gambling, saw about $23.5 billion wagered at its gaming tables last year, four times the Las Vegas Strip.

Less than two months after the lawsuit, Macau’s vice squad conducted a sex-trade raid on Sands’ flagship Venetian hotel while officials turned down the company’s bid for a piece of land on the city’s lucrative Cotai Strip.

A spokeswoman for Sands China told AFP on Wednesday the firm would “assist with the investigations”, while its parent company’s annual report said it intends to “vigorously defend this matter”.

The spokeswoman denied the allegations laid out in the wrongful termination claim filed in Nevada by former executive Steven Jacobs, while the company has previously called him a “disgruntled former executive” who was sacked for good cause.

The annual report said the US probe “emanated” from the lawsuit, which claimed Sands’ billionaire founder Sheldon Adelson made “repeated and outrageous demands” on Jacobs.
Those claims included arranging “secret investigations” of Macau officials to use as leverage against negative policy decisions and threatening to withhold business from “prominent Chinese banks” if they refused to use “influence” on senior government officials.

Jacobs also said he was forced to keep secret “truthful and material information” from Sands’ board including allegations of the company’s ties to Macau’s notorious triad gangs, long reputed to operate in the city’s casinos.

“When Jacobs objected to and/or refused to carry out Adelson’s illegal demands, Adelson repeatedly threatened to terminate Jacobs’ employment,” the claim said.

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