Embattled online gambling operator Jack Lam has sold his controlling stake in Jimei International Entertainment Group Ltd, the Hong Kong-listed junket investment company announced on Wednesday.
Jimei International disclosed in a filing that the deal, which took place last April 7, involved a maximum consideration of HK$443.2 million (US$57 million) for Lam’s 65.05 percent stake. It will be divided into two batches: the first, totaling HK$222 million, was already settled, while the second batch, which amounts to HK$221.2 million, will be paid on January 5, 2018.
Under the deal, the amount for the second batch of payment may be adjusted downward if Jimei International “is unable to recover part of its outstanding receivables,” estimated to be at HK$227 million, at the end of 2017.
Lam’s company, Reach Luck International Ltd, has been identified as the seller in Jimei International’s filing, but the document did not mention if the beleaguered junket tycoon will keep any shareholding in Jimei International after deal is finalized.
Lam’s lucky buyer is Cosmic Leader Holdings Ltd, a company incorporated in the Seychelles three months ago. Cosmic Leader is owned by Yan Xu, who has an 80 percent interest in the company, and Chen Hong, who controls the remaining 20 percent. Chen already had a 0.04 percent stake in Jimei International, according to the junket investment company.
Lam and the owners of Cosmic Leader were reportedly introduced by Chau Chit, executive director of Jimei International.
Cosmic Leader plans to maintain Jimei International’s listing on the Hong Kong Stock Exchange. The document stated the new controlling shareholder intended Jimei International, which has junket arrangements with two casino properties in Australia, to “continue its existing businesses.”
Cosmic Leader will also “conduct a review on the business operations and financial position of the group for the purpose of formulating business plans and strategies for the future business development” of Jimei International, the filing said.
Lam, a veteran investor in Macau junkets, is involved in junket operations at City of Dreams Macau via its privately held company, Jimei Group. The group also runs Jimei Casino next door to the Grand Lapa hotel on Macau peninsula under an SJM Holdings gaming licence.
Jimei Group had been operating the Fontana Casino at the Fontana Hot Spring Leisure Parks at Clark Freeport Zone and Fort Ilocandia Hotel and Casino in Laoag City until Philippines’ President Rodrigo Duterte ordered the seizure of Lam’s gaming assets in the country in connection with the latter’s alleged failure to pay taxes.
The government also ordered Lam’s arrest several days after 1,316 Chinese nationals were arrested for illegally working at an online gambling operation run out of Lam’s Fontana Casino.
Lam fled the country shortly after the arrests and hasn’t been seen since. Philippine president Rodrigo Duterte originally ordered Lam’s arrest for bribery and economic sabotage but later said Lam could resume his local gaming operations if he paid the necessary fines and back tax obligations, a sum totaling PHP13.9 billion (US$276 million).