Singapore blocks listing by Cayman casino company

Friday, September 25, 2003

SINGAPORE: According to recent reports by Reuters, the Monetary Authority of Singapore, which regulates the Singapore Exchange, has decided to block the initial public offering (IPO) of Cayman-registered casino operator NagaCorp Ltd.

NagaCorp Ltd. has a 70-year casino licence in the Cambodian capital of Phnom Penh and its registered office in Cayman is located at the local office of a well-known Bermuda law firm. The company currently operates from a barge moored on the Mekong River in Phnom Penh, but plans to relocate to a five-star hotel and entertainment complex called NagaWorld.

NagaCorp Ltd., which is controlled by Malaysian businessman Chen Lip Keong, was said to be targeting $100 million in proceeds from its planned share sale. It has spent the last two years preparing for the listing, aided by six law firms and two accounting firms. 

The Singapore Monetary Authority apparently had reservations over the firm's ability to avoid money laundering and said "it would not be in the public interest" to register NagaCorp's prospectus. 

"MAS has reservations that NagaCorp's operations are not subject to a fully developed and implemented legal and supervisory framework for the regulation of casinos and the prevention of money laundering," the authority said in a statement. 

It said the company also did not have an established track record of independent audits of its internal controls over money laundering risks. 

NagaCorp had planned the Singapore IPO to raise funds to finance the US$50 million, five-star hotel and entertainment complex and will appeal to the MAS to reconsider its listing. The initial ten-day appeal period has been extended until the 29 September.

Singapore's three banks are said to have decided against involvement with the company because of concerns over legal and regulatory matters and financial institutions in Singapore have been supportive of the MAS decision.

Cambodian Prime Minister Hun Sen has endorsed NagaCorp's listing and the country's Ministry of Tourism is making efforts to attract visitors with a "Visit Cambodia Year."

The fact that gambling is unlawful in Singapore does not seem to have been a factor in the MAS decision. However, the Cayman Islands Gaming Law (1996 Revision) states that "unlawful gaming" includes: "The act of betting or of playing a game for a stake when practiced in any place to which the public have access." It defines place to include boats or any vessel that is afloat. It goes on to qualify that any gambling activity is illegal by a local company "whether within the Islands, or in any country or place outside the Islands".

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