The investigation into alleged improper business practices by the Las Vegas Sands Corporation has now gone international. Sands China Ltd. issued a statement to the Hong Kong Stock Exchange saying that it is being investigated by Hong Kong’s Securities and Futures Commission, which is similar to the federal SEC in the United States.
In the brief statement, the casino said the investigation relates to “alleged breaches” of financial regulations and that they have been asked to turn over documents to the SFC. All of this is likely related to the current investigation by the U.S. Securities and Exchange Commission into whether or not the Sands is guilty of violating the Foreign Corrupt Practices Act.
That investigation, and likely the current Hong Kong investigation, stems from allegations made during a lawsuit by Steve Jacobs, the former CEO of Sands China. Jacobs was fired in July 2010 for what the company says are legitimate reasons. They said that he exceeded his authority and did not keep the board of directors informed on important business affairs. Jacobs alleges that he was fired for refusing to break the law by bribing and blackmailing Chinese government officials for favorable treatment in order to get a casino license. Aside from the extortion, Jacobs alleges that he was told to influence the government officials by making the major banks in China put pressure on them by threatening to withhold business.
Jacobs’s lawsuit is ongoing, as is the U.S. SEC investigation and the Hong Kong SFC investigation. If the allegations turn out to be true, the Sands and chairman Sheldon Adelson could be in a world of trouble in two countries.