Singapore Set To Punish – Will Genting Get Casino License?

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Feb 27 2007
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Singapore authority is seriously MAD at Genting Berhad (KLSE: GENTING, stock-code 3182) and is set to teach the junior Lim a painful lesson he’ll never forget for the rest of his life. If today’s statement is any indicator to goes by, Genting’s two affiliates Star Cruise Ltd (SIN : S21) and Genting International (SIN : G13) might be severely punished (get ready for the stocks price to get beaten as well) for showing disrespect to Singapore by announcing a partnership with Stanley Ho without consulting Singapore authorities.

Singapore said it has not yet awarded a casino license to Genting Berhad, even though the Malaysian gaming group won a tender in December. On Thursday, Genting is due to sign an agreement with Sentosa Development Corp., a government-owned body which runs the resort island where the casino will be built.

“The signing of the development agreement and the issuance of a casino license are two separate matters … The signing of the development agreement allow Genting International and Star Cruises to proceed with the construction of the integrated resort. However, it does not automatically qualify them for the casino license, which is needed before it can operate the future casino,” Singapore’s Ministry of Home Affairs casino regulator said in an emailed statement today, 27-Feb-2007.

Analysts said the deal between Genting and Stanley Ho has clearly upset the Singapore authorities, prompting the regulator to warn today that it may withhold the license for the casino, potentially the most lucrative component of the entire resort. The casino regulator said in a statement that Genting’s eligibility for a casino license would depend on its suitability as specified in a key clause in Singapore’s casino act. That clause states that operators must not have any business association with any partner who “is not of good repute having regard to character, honesty and integrity or has undesirable or unsatisfactory financial resources.”

The statement is obviously targeting at Stanley Ho’s unproven but known connection to Macau’s reputation for massage parlours and triad gangs together with money laundering. I think Genting needs to sever the connection between Genting and Stanley Ho if it really treasures the Sentosa project that it won. With this negative news together with Dow Jones which shed 120 points at this moment, expect Genting related stocks to take a beating tomorrow when the market opens.

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