LAS VEGAS (Reuters) - Las Vegas Sands (LVS.N) Chairman and CEO Sheldon Adelson said on Thursday a Hong Kong businessman claiming in a lawsuit that he is owed $328 million didn’t help the gaming company get permission from the Macau government to operate a casino there.
Richard Suen alleges the Las Vegas company stiffed him on an agreed upon “success fee” for helping secure a permit for a hotel and casino in Macau, a Chinese special administrative territory that has become the world’s most lucrative gambling mecca.
“He couldn’t deliver and he wanted to keep his fingers in the pie,” the 79-year-old Adelson testified in a Las Vegas court. “Once he couldn‘t, he wanted to get his fee and offered other services,” such as public relations and arranging financing, said Adelson.
Adelson, who entered the courthouse on a motorized scooter and looked frail and unsteady as he walked to the witness stand with the aid of a cane, nearly caused a mistrial by presenting promotional brochures for his convention business that hadn’t been cleared to be introduced into evidence.
Adelson produced the brochures in court despite instructions from his legal team not to bring them, his lawyer Richard Sauber said. Adelson was using the brochures to show that Sands didn’t need Suen’s help in marketing.
Sands has become one of the world’s most profitable casino companies over the past decade, largely on the strength of its Macau operations.
But the company faces allegations from Suen and from its former China CEO, Steve Jacobs, who has also filed a lawsuit against Las Vegas Sands for wrongful dismissal. Jacobs alleges that Adelson demanded he conduct “secret investigations” into the finances of Macau government officials in order to “exert leverage.”
Adelson has denied Jacobs’s allegations.
The company said in financial filings with the U.S. Securities and Exchange Commission that it “intends to defend this matter vigorously.”
Adelson’s testimony on Thursday came on the second day of the retrial of the Suen case. In 2008, a jury in Nevada state court awarded Suen $43.8 million in damages, plus interest. But an appellate court overturned that verdict on the grounds that some of the evidence used was inadmissible.
Suen’s attorney, John O‘Malley, estimated in opening arguments for the current case that the amount his client was owed had increased to $328 million, based on what he said was an agreement for Suen to receive $5 million plus 2 percent of Sands’ net profits in Macau.
In his opening argument, O‘Malley detailed meetings he said Suen arranged for Adelson, including with one of China’s then vice-premier Qian Qichen and with Beijing Mayor Liu Qi. The lawyer said Adelson offered help in defeating a House of Representatives resolution against awarding the 2008 Olympic Games to Beijing.
But Adelson said this wasn’t the case.
“The idea that me, a kid from the slums, could help China, the largest country in the world, as if it had no lobbyists of its own, is ludicrous,” Adelson said from the stand.
The Chinese government did not respond to a request to comment on the 2008 Olympic Games.
Sands has said that it won the Macau license without Suen’s assistance.
Adelson said Suen contacted him in 2000, before Macau said it would end its government monopoly over gaming.
Adelson said he met Suen in the Peninsula Hotel in Macau and then in the meeting room at the Macau airport where the Hong Kong businessman introduced him to two Chinese businessmen.
“Suen brought two guys, Liu or Chu, something like that,” Adelson said. “I‘m not very good at Chinese names. I‘m not always good at English names.”
Adelson testified that after failing to deliver help in winning the license, Suen next offered to help Sands find financing and investors for the Macau casino.
He also offered to arrange public relations and lobbying for the company, which Adelson said he declined.
Sands has disclosed in regulatory filings that it received a subpoena from the SEC in 2011 related to its compliance with the Foreign Corrupt Practices Act (FCPA), and had been advised the U.S. Department of Justice was conducting a similar investigation.
The results of an investigation by the Sands board after it received the subpoena found “likely violations of the books and records and internal controls provisions” of the FCPA, Sands said in a December 31 filing with the SEC. It also said at that time it had improved its practices.
A spokesman at Las Vegas Sands could not be immediately reached for comment.
Sands said in the filings that it believes the Justice Department subpoena may have been prompted by Jacobs’ lawsuit, which was filed in 2010. Jacobs was present in the packed Vegas courthouse for Adelson’s testimony on Thursday, but declined to comment on his case.
(Additional reporting by Ronald Grover; Editing by Jonathan Weber, Martin Howell and Ryan Woo)
The story corrects 17th paragraph to say "before" instead of "after"