Casino Developer Landing Intl Sinks 45% on HK Exchange After Chairman Detained

Landing International Development, a Hong Kong-listed casino builder, reported to the Hong Kong Stock Exchange on Thursday that the company is unable to contact its 47-year-old chairman Yang Zhihui, who controls 50.48 percent of the company.

According to a report in Hong Kong media outlet Winmoney.hk, Yang’s absence is due to the one-time billionaire having been arrested by the Cambodian police at Phnom Penh International Airport. A picture posted on Winmoney’s website shows a man in a blue polo shirt, believed to be Yang, handcuffed and being taken away by two men in black suits.

Yang’s detention is said to be related to business ties between the developer that he controls and Huarong International Financial Holdings, a unit of Chinese government-owned “bad bank” Huarong Asset Management. Huarong chairman Lai Xiaomin was arrested in April by Chinese officials after being charged with “serious discipline violations” and has become the subject of an anti-corruption probe.

Landing’s stock has plummeted 45 percent on the Hong Kong exchange since the news was published and closed at HK$3.19 per share on Monday. The gaming developer has also drawn fire this month from Filipino president Rodrigo Duterte, who has hurled charges of corruption after Landing reeled in a 70-year agreement to operate a casino in Manila.

Landing Says Everything Is OK

In the same filing to the Hong Kong exchange, that revealed Yang as missing, Landing said it does not expect the temporary absence of its commander and founder will have a material adverse impact on the daily business operations and financial positions of the Group.

However, shortly after Yang’s absence, the stock of Landing sharply dropped from HK$5.79 to HK$3.76, down by 35.1 percent, before the trading was suspended from 10:53 am on August 23rd. Trading was resumed on the morning of August 24th and the share price stood at HK$ 3.19 by the end of trading on Monday.

The nature of Landing’s ties to Huarong Asset Management remain unclear, however, filings with the Hong Kong stock exchange show that the asset manager’s Huarong International Financial Holdings unit lent HK$660 million ($84 million) to a holding company controlled by Yang in December 2016.

Landing Opens on Korean Island, Runs Aground in the Philippines

Landing opened its only casino-based resort in Jeju Shinhwa World in Korea in February of this year. Shinhwa World is an integrated entertainment area comprised of four luxury hotels, a 10,000-square-metre casino with 155 gambling tables, theme parks and attractions. Covering an area of 2.52 million square metres, Landing has called the Jeju casino project a $2.2 billion investment.

Soon after Jeju Shinhwa World’s opening in February of this year, Landing started to expand its business in Southeast Asia.

In July, the company, which has a market capitalization of about $1.4 billion, was granted a license to build a $1.5 billion casino in Manila’s Entertainment City gaming enclave. Yang said that the investment in the Philippines “is an ideal opportunity” for the company to expand its footprint into Southeast Asia, and earlier document issued by Landing stated that the casino at the integrated resort would, would have a gross floor area of approximately 28,000 square metres (301,389 sq feet).

However, shortly after the Hong Kong-listed company signed the agreement for the project on August 7th, a spokesman for Filipino president Rodrigo Duterte said the contract leasing the site to Landing would be canceled because the rental payment specified was “unconscionable”.

Landing has since clarified in a statement that the company has not yet received any official communications from the Philippines government regarding changes to its approvals, but said that it was aware that Duterte had expressed his dissatisfaction with the deal’s 70-year lease period and had called it “ridiculously long.” The casino project has now been suspended since the beginning of August.

Landing Plays a High-Stakes Game

Landing Group was established by Yang Zhihui in eastern China’s Anhui Province in 2007, and achieved a back-door listing on the Hong Kong exchange in 2013 by acquiring Greenfield Chemical.

The company disposed of its Shanghai-listed entity in 2014 due to debt issues, however, it scored a windfall in 2017 when it sold Les Ambassadeurs Club and Casino in London for  £240 million (then $320.3 million), turning a £91 million profit less than two years after purchasing the UK gaming establishment for £131 million at the start of 2016.