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Suncity Group immerses 48% in CEO arrest | Financial Markets

The world’s largest junket operator has seen the biggest drop in share prices since 2008.

Suncity Group Holdings Ltd. went down the most since 2008, when shares began trading in Hong Kong after news of the arrest of CEO Alvin Chau.

It was a 48% drop in the list arm of the world’s largest junket operator, as it believed businesses would be detrimental if the CEO lost financial support. Shares of other Macau casino operators were mixed on Monday after suffering heavy losses.

Suncity said in a regulatory dossier that Chau, who was arrested on Nov. 26, intends to resign as president and chief executive officer. Macau’s judicial police said on Sunday that they had set up foreign gaming platforms and admitted to engaging in illegal virtual betting activities. Junkets provides high rollers service and extends credits to them.

“We’re moving into a no-junk scenario for Macau casinos,” Bloomberg Intelligence analyst Angela Hanlee said. Macau gaming companies could face a severe downturn in the VIP gaming business as authorities step up oversight of mainland China’s junkets, he wrote in a November 26 note.

Suncity said no of his subsidiaries or employees are being investigated in connection with Chau’s arrest.

Although the company said it is dependent on financial support from Chau and related companies, the board does not expect the incident to have a detrimental effect on Suncity’s day-to-day operations, according to the file. Suncity’s listed arm does not include his junket operation.




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