November 8, 2020

SunCity Just Experienced the Biggest Money Laundering Scandal in Its History

 

Since late June, the news about SunCity Group Macau involved in cross border money laundering has gone viral. According to the online hearsay, Chau Cheok Wa, chief executive and director, has been providing funds to pro-democracy activists in Hong Kong. Rumours also claimed that Chau was under official investigation. And authority froze the bank account of SunCity.

As soon as the news was out, clients rushed in the casinos in Cambodia to withdraw their money deposited in SunCity premier accounts. This resulted in a capital run of over 4 billion in SunCity Cambodia.

According to the rumour, SunCity was linked to a series of pro-democracy protests in Hong Kong since 2019. The passing of the National Security Law against Hong Kong has led to a series of investigations on the funding for illegal activities threatening national unity. The charges against SunCity, whether it was official or not, shook the group like an earthquake.

The scandal even impacted the other entertainment business of SunCity, such as film and television. It influenced people like actor Andy Hui and movie director Derek Tsang, who are working for Sun Entertainment Culture Company. And a number of other artists who have been working for the group are also questioned by the public about their political stand.

The SunCity public relations team responded quickly to ease the tension.

On July 13, Chau was trying to clear the rumours in person by releasing a nearly 7-minute conference video. In the video, he shared the company’s recent financial reports and reserve funds, clarifying the rumour that the company was involved in funding protests.

SunCity CEO Chau during the video conference

 

He firstly denied that “Suncity Group has been funding the rioters” and blamed the rumours were extremely absurd. He also claimed that he would never support any activities that would harm the country.

There were rumours that the legal authorities in Mainland China have acquired the information of clients in Suncity VIP Club. In response, Chau said he never received requests for providing clients information from overseas nor the government.

He pointed out that the company is registered in Macau and thus regulated by the Macau Personal Data Protection Law. SunCity has never disclosed any customer information to the public.

By saying that the total reserves of the Suncity VIP Club were approximately HK$10.58 billion. Once again, he proved the healthy and stable cash flow of the group.

In addition, he emphasized the group has never sent any staff to the mainland to promote or conduct gaming business. All of the business activities and funds are within Macau and other regions where gaming is a legal business.

In the end, He blamed the people who spread rumours are posing risks on the economic development of Macau, and therefore, should be condemned.

After the conference video, Chau met with government officials to break the rumours.

On July 21st, Yao Jian, deputy director of the Liaison Office of the Central Committee of Macau, met with Chau to award Suncity Group a certificate for its donation and contribution in fighting the epidemic.

Yao Jian said at the ceremony that SunCity immediately donated money and other resources to aid the epidemic area out of a strong sense of social responsibility. “SunCity and Chau showed the patriotism of people in Macau.” Yao Jian said.

Chau receiving award from the government officials

According to a previous news report, Suncity Group donated MOP 30 million (US$370 thousand) to the Hubei where the epidemic breakout happened the first.

After the meeting, Chau personally donated MOP 30 million (US$370 thousand) to Hubei and also raised nearly 60,000 masks and other scarce anti-epidemic materials to the front line workers.

It is the second time that SunCity was suspected in money laundering.

In August 2019, the Australian media Sydney Morning Herald reported that there were outflow documents of Hong Kong Jockey Club. The documents revealed that Australian legal authorities expressed a concern to Hong Kong Jockey Club that SunCity and Chau might have been related to some money laundry activities.

In February this year, the Australian media once again reported Cheng Ting Kong, another person from SunCity senior management transferred 500 million Australian dollars from Macau to Australia over the years. He spent 75 million Australian dollars to invest in the local horse racing business.

Afterwards, Cheng Ting Kong, clarified that he has no actual business execution rights on Suncity and just an investor. He emphasized that he has been operating all his business in legally in Australia and has nothing to do with Suncity.

SunCity keeps expanding to the Southeast Asian market under great financial pressure.

According to the latest 2019 financial statement released by Suncity, the loss reached 217 million dollars, which was a further increase from the 211 million dollars loss in 2018. The accumulated loss in the past two years was nearly 434 million dollars. On the other hand, SunCity keeps expanding its business in Southeast Asia.

In May, Suncity stated that it has obtained a Vietnamese gambling license and legally operates casino business. The license is valid until December 10, 2080. Among them, Hoi An South Coast Integrated Entertainment Resort already had a trial opening on June 28.

There is speculation that SunCity already left the Philippines for Cambodia. In response to that, SunCity clarified that the group has not considered departing from the country and its VIP club business is still running normally there.

In Cambodia, Suncity and Haoli Entertainment in Sihanoukville together built a tourism and entertainment complex. The official launch will be in the second half of this year. This project is known as the top entertainment centre in Southeast Asia. SunCity signed the deal on September 5, 2018, and is responsible for consulting and management services.

Conclusion

The money laundry storm of Suncity seems to finally come to an end. However, a gaming business insider believed that, compared with all the ML charges against SunCity, the crisis this time may have some further legacy on the overall gaming industry in Asia.

 

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