Genting facing lawsuit
Malaysian casino giant Genting Bhd is facing a lawsuit from a partner alleging that the company has been dumping vast liabilities onto its Resorts World Bimini (RWB) property in the Bahamas.
RAV Bahamas, which owns 22% of the RWB operating entity BB entertainment, alleged in a lawsuit filed last Monday that Genting, who owns the remainder of the stake, dumped more than a billion dollars of liabilities onto the Bahamas property in “a massive and co-ordinated fraud.”
The lawsuit, filed in the US District Court for the Southern District of Florida, stated: “To date, BB Entertainment has not distributed any profits to RAV from this venture because Genting Americas, who controls BB Entertainment’s finances, has used BB Entertainment as its financial wasteland.”
Genting Americas has used BB Entertainment to conceal a medley of fraudulent activities”
“Through its stranglehold over BB Entertainment and its finances, Genting Americas has used BB Entertainment to conceal a medley of fraudulent activities.”
Partnership turns sour
The RWB property, a 10,000 square-foot casino, also contains 305 hotel rooms, multiple restaurants and lounges, as well as facilities for docking cruise ships.
The BB Entertainment partnership was initially formed as a 50/50 venture in 2012 to develop RAV’s Bimini Bay property, with RWB being constructed on land owned by RAV later before Genting took over majority control.
“The estimated value of BB Entertainment’s resort is substantially less than the approximately US$900 million in liabilities that remain on BB Entertainment’s financials,” stated the lawsuit.
“Genting Americas has effectively deprived RAV of the entire value of RAV’s over 20-acre contribution without having ever received any return for that contribution.”
hundreds of millions of dollars in illegitimate debt”
“What is clear is that Genting Americas’ fraudulent accounting practices have drowned BB Entertainment in hundreds of millions of dollars in illegitimate debt.”
RAV is seeking damages of over $600m from Genting, which is valued at around $3.13bn.
BB losses mounting
BB Entertainment’s auditor has also expressed doubts about the future of the partnership, with RWB consistently incurring losses since the partnership began in 2012.
The group recorded a $151.28m loss for the year ending Dec 31, 2022, a significant increase from 2021, when it recorded losses of $114.2m. The partnership’s liabilities now stand at a total of $885.2m.
Genting Americas is of the view that the complaint is baseless and totally without merit”
Responding to the lawsuit, Genting stated: “Genting Americas is of the view that the complaint is baseless and totally without merit and will vigorously defend against the complaint.”
The company said it would comment further as the situation developed.