Las Vegas Sands Ends Six-Year Termination Case After Settling With Former Macau CEO
Posted on: June 1, 2016, 12:48h.
Last updated on: June 1, 2016, 12:51h.
Las Vegas Sands Corp, the parent of Macau casino giant, Sands China Ltd, has finally settled its wrongful termination case with former CEO, Steve Jacobs. The settlement brings to an end a six-year battle which started with Jacobs losing his job as head of one of the world’s largest gaming firms.
Although Sands themselves have not disclosed the exact amount of the settlement, the Wall Street Journal suggests it is in the region of $75 million.
In a statement released to the Hong Kong Stock Exchange, Sands China said:
“On or about May 31, 2016, the parties to the proceedings reached a comprehensive and confidential settlement through which Mr. Jacobs dismissed all claims in the Nevada state and federal cases against our controlling shareholder, Las Vegas Sands Corp., the company, our subsidiary Venetian Macau Ltd., and Mr. Sheldon G. Adelson and released all claims as of that date.”
Jacobs Fired For “Whistle-Blowing”
Steve Jacobs served as CEO of Sands China Ltd from 2009 to 2010. However, he was kicked out of his job and took his employers to court for wrongful dismissal. Jacobs claimed that he was fired for bringing to light “improprieties” in the way the Macau business conducted its affairs.
Sheldon Adelson, head of Las Vegas Sands Corp, counter-sued and denied all allegations from the former head of Sands China.
A potentially damaging trial (for Sands and Adelson) was due to start later this month but was put back to September after Sands attempted to have the judge in charge removed from the case.
Sands Hit On All Fronts By Macau Storm
The new Jacobs resolution comes two months after Adelson’s firm agreed to pay $9 million to settle an anti-bribery case brought by the US Securities and Exchange Commission.
While the SEC also investigated Jacobs’ claims against his former employers, it was discovered that Sands COO William Weidner kept inaccurate books and records which largely hid millions of dollars of payments made to a consultant based in Asia. Sands maintained their innocence throughout, and the SEC investigation found no evidence of bribery.
Sands China will hope that the Steve Jacobs settlement draws a line under an affair that has dragged on for six years. The Asian giant can now carry on preparing the opening of its newest Macau casino, Parisian Macao, which, with Wynn Palace, will add over 4,500 rooms to the city. Launching later this year, the Parisian will, like Paris in Las Vegas, feature a replica Eiffel Tower adoring the Macau skyline.
Analysts suggest that the months and months of 20-30 percent gaming revenue declines may be over. Indeed, GGR drops of 10 percent in April and May for Macau compared to a year ago are seen as a bright light in a region slammed by an economic slowdown, anti-corruption moves from the Chinese mainland government, and a general fall-off of VIP gamblers coming to the city.
Gross gaming revenue overall fell 9.6 percent, marking two years of steady decline. Casino revenues in the whole of Macau for May sat at $2.3 billion. Whether Sands’ and other developers’ moves towards targeting tourists and mass-market gamblers pays off remains to be seen.