Published in: Latest Intelligence
In the last few months a company owned by Americans operating in the casino industry in Laos, the small landlocked country bordering on economic tigers Thailand and Vietnam, took the unusual step of suing its partner and host Government in the World Bank. The company, Sanum Investments, wasn’t quiet about doing so either. Headlines such as “Major Foreign Investor Sues Laos Over Multi-Million Dollar Investment Seizure” and “Lao Government Sued Over Investment “Misconduct”” appeared in print and online editions of media across Asia Pacific.
The company claimed hundreds of millions of dollars in damages when a slot parlour it was operating was taken back by its former Lao partner and landlord after a business dispute. It then had a range of tax charges levied against it by the Lao Government on its casino operations in the southern Lao city of Savanakhet, who suspected Sanum Investments of falsifying gaming earnings and tax payments. The Lao Government even went to the extent of bringing in a firm of accountants from Singapore to run through the accounts for an extended period.
The Lao Government adopted a policy of refusing to talk to the press, leading to one sided stories peddling the company’s position or looking for other examples of foreign investments gone awry in the country – few were found and reported on. However, insiders say the senior Government officials are unhappy with the investor’s actions and PR and are now considering a wide range of retaliatory actions against the company. Sanum Investment executives have gone on record saying they are scared for their lives and will not be returning to Laos, choosing to continue to manage their Lao affairs from Cambodia and Saipan. This appears highly unlikely according to other long-term expatriates working in the capital, Vientiane.
Rumours swirling around Government circles now say that Sanum Investments may be back peddling furiously in an attempt to retain control of their prized asset, Savan Vegas Casino. The owners of Sanum have also been hit by the closure of their other casino project in Asia, Cambodia’s Hatien Vegas. Even though the PR is still rolling out, taxation payments may have been made by the company to the Government, which would suggest a cooling down of the white hot situation between the parties.
New casino to open in the North
After the closure of the Grand Boten Casino in the Northern Lao town of Boten, which is the main transit point from China (Yunnan Province) into Laos, earlier this year, the Government proclaimed that no further licenses for casinos were to be issued without serious scrutiny of the business plan and the investors involved.
Boten, which was a Lao – Chinese joint venture, was touted as a major coup for Laos when it was signed in the late 1990’s. By 2012, rather than being a major economic hub, it was a seedy casino town where Mandarin was the main language, Lao nationals were a tiny minority and rumours of kidnappings and deaths for bad debts blighted what ought to have been a Lao success story. Ultimately, Chinese Government pressure was brought to bear and the Lao Government closed the casino down and, with it, the economic activity it had brought, along with some anger at how this had come to pass.
However, one Lao-Thai group, AAC Green City, had already secured a license for a similar style of economic hub before this proclamation. This was to be adjacent to Thailand in the North West and reports are that the casino resort within the development looks like opening later in 2013. Naka Casino will be 3 hours further from the Chinese border by good road from Boten, but it is now the closest casino in Laos to China. AAC Green City owners are a very well respected family from the region and insiders say it is highly unlikely to be operated like its older, now deceased neighbor in Boten.