Published on: October 9, 2024, 02:26h.
Last update on: October 9, 2024, 02:32h.
A company that collaborated with Genting on Resorts World Bimini in the Bahamas alleges that the Malaysian casino giant has engaged in “fraudulent accounting practices,” leading to “hundreds of millions of dollars of illegitimate debt.”
A civil lawsuit filed on Monday in the US District Court for the Southern District of Florida against Genting’s US arm, Genting Americas, alleges that Resorts World Bimini has turned into a “financial wasteland” that allows the company to conceal a “medley of fraudulent activities.”
These activities include “the artificial inflation of the profits and valuations of Genting subsidiaries and other affiliates, and the manipulation of the debt-to-equity ratios of its projects in the US and abroad,” according to the lawsuit.
Vacation Destination
The plaintiff in the lawsuit is RAV Bahamas, a company owned by the Florida-based Capo family. In the late 1990s, RAV acquired over 700 acres of land on the island of Bimini, in the Commonwealth of the Bahamas, about 45 miles off the coast of Florida.
The goal was to create a vacation spot for Floridians featuring homes, resorts, and restaurants amidst Bimini’s white-sand-emerald beaches, as outlined in the lawsuit.
From 2002 onwards, RAV started developing the northernmost part of North Bimini and by 2011 had built the Bimini Bay resort, which included villas, marinas, and recreational areas.
In 2012, Genting persuaded RAV to join forces on a casino project to further enhance the Bimini Bay Resort. RAV agreed to establish a company with Genting, BB Entertainment, which would own and develop the project, and transferred more than 20 acres of land to the new entity, according to the complaint.
Resorts World Genting officially opened in 2013. Today, the island-resort features a 10,000 square-foot casino, a 305-room hotel with surrounding eateries, lounges, and a jetty for cruise ships.
Mystery Debt
However, RAV claims it has not received any profits from the venture as Genting Americas controls BBE’s finances, and the company is over $885 million in debt. To put this into perspective, as of December 31, 2022, BBE’s liabilities surpassed the combined liabilities of Genting Malaysia and its approximately 150 subsidiaries.
“Only through a massive and coordinated fraud could nearly a billion dollars of debt be imposed on a small island resort, where RAV had already developed most of the important infrastructure,” argues the lawsuit, which seeks $600 million in damages.
Genting Americas concealed the nearly billion-dollar liabilities in consolidated statements by using vague expense categories to hide the fraud from RAV,” it further states. “At every juncture, Genting Americas has intentionally hindered RAV’s efforts to gain clarity on the financials, including denying RAV full access to BBE’s financial records and rejecting its requests for an independent audit.”
RAV alleges that Genting operates a complex and “intentionally tangled” network of subsidiaries that “provide or claim to provide” services to its resorts.
“Genting Group’s opaque corporate structure, consisting of layers of subsidiaries, enables Genting Americas to conceal its financial misconduct and obscure its fraud,” alleges the lawsuit.
Genting Americas had not yet responded to Casino.org’s request for comment at the time of publication.