Sands to Pay $9 Million In SEC Settlement -- WSJ
April 08 2016 - 2:31AM
Dow Jones News
By Aruna Viswanatha,Alexandra Berzon and Kate O'Keeffe
Casino giant Las Vegas Sands Corp. will pay $9 million to settle
Securities and Exchange Commission allegations that its Chinese
operations had poor accounting controls from 2006 through at least
2011, the agency said Thursday.
The allegations focused primarily on the company's sponsorship
of a Chinese basketball team, plans for a business center in
Beijing, and a ferry deal in Macau.
The SEC said the gambling company, controlled by Republican
megadonor Sheldon Adelson, transferred more than $62 million to a
consultant in China, often without supporting documents or
appropriate authorization, and "despite knowledge by senior LVSC
management that they could not account for significant funds
previously transferred to the consultant."
The settlement, which also requires an independent monitor for
the company for two years, ends one piece of a saga that started
more than five years ago, when a former Sands executive set off a
firebomb by alleging improprieties in Macau, a Chinese territory
that is the world's largest gambling hub.
The allegations by Sands's former top Macau executive, Steve
Jacobs, prompted the SEC and the Justice Department to investigate
whether the company had violated the Foreign Corrupt Practices Act,
which bars U.S. companies from bribing officials of foreign
governments.
While the Justice Department investigation is still open, it
appears unlikely that it will result in any criminal charges,
according to people familiar with the matter.
Sands said it is continuing to respond to the Justice Department
inquiry.
A wrongful termination lawsuit filed by Mr. Jacobs in 2010 that
includes bribery allegations is scheduled to go to trial this
summer. The company has denied wrongdoing in that matter and says
Mr. Jacobs was fired for legitimate reasons.
Mr. Jacobs's attorneys said in a statement that they are looking
forward to introducing evidence on the alleged FCPA issues in
court.
The SEC didn't accuse Sands of paying bribes, but said it
violated provisions of the law that require companies to maintain
proper controls. The company neither admitted nor denied the
allegations, according to the settlement.
In a statement issued Thursday, the company said it has enhanced
its financial controls and anticorruption policies.
"The projects were orchestrated through a consultant whose
activities under a former company president and other former
employees were not sufficiently monitored," the statement said.
The former Sands president, William Weidner, said in an
interview with The Wall Street Journal that he isn't responsible
for any wrongdoing alleged by the SEC. He said that while he
oversaw the projects in question, he didn't supervise the
accountants and lawyers who handled the payments and structured the
deals.
The Wall Street Journal first reported on the deals criticized
by the SEC in a 2012 story.
Among them was Las Vegas Sands's 2007 effort to buy a
professional basketball team in China to improve its image. Since
Chinese authorities barred gambling companies from buying teams,
the company had a consultant do it for them and subsequently fired
an executive who had raised concerns about the transaction, the SEC
said.
The SEC also flagged the company's use of the consultant, who
claimed to be a former Chinese government official, to buy portions
of a Beijing building from a Chinese state-owned company to develop
a business center bearing Mr. Adelson's name, the SEC said.
Employees raised concerns that the Beijing real-estate deal was
done solely for "political purposes," but the company still
transferred $61 million in connection with the deal, the SEC said.
After the Adelson Center project was cancelled, the company got
back around $44 million of that sum from the consultant.
The SEC also took issue with a 2007 deal in which it alleges
Sands signed a contract with a high-speed ferry company partially
owned by a Chinese state-owned company in the hopes that it would
be "politically advantageous," according to the settlement.
Sands's internal auditors found that the ferry company, which
shuttled gamblers to Macau, provided meals to government officials
and gave them envelopes filled with cash around Lunar New Year, the
settlement said.
Mr. Adelson sued Wall Street Journal reporter Kate O'Keeffe for
libel in 2013. A spokeswoman for the Journal, which wasn't named in
the suit, said the newspaper would continue to vigorously defend
Ms. O'Keeffe.
Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com and
Alexandra Berzon at alexandra.berzon@wsj.com
(END) Dow Jones Newswires
April 08, 2016 02:16 ET (06:16 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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