Suncity Group could change hands due to Cheok Wa debt

Star Soul Investments Ltd, a company led by Alvin Chau Cheok Wa, must repay just over HK$313.6m (US$40.2m) to a group of lenders.

Macau.- The problems continue for Suncity Group Holdings. Two weeks after the arrest of Alvin Chau Cheok Wa on cross-border gambling and money laundering accusations, it’s emerged that the operator could change hands if one of the CEO’s companies doesn’t repay a debt in full.

Cheok Wa’s Star Soul Investments Ltd reportedly has until midweek this week to repay HK$313.6m (US$40.2m). If it fails to pay, the 4.99m Suncity Group shares pledged by Cheok Wa as a loan guarantee may change hands to cover the debt. The shares represent approximately 74.85 per cent of the total issued share capital of Suncity.

The shares are controlled by an entity called Fame Select Ltd, which is 50 per cent owned by Alvin Chau Cheok Wa and 50 per cent by Zheng Tingkang. If these shares flow to the lender, it may result in a change in the control of Suncity Group Holdings.

Last week, shares of Suncity Group Holdings and its Summit Ascent division were suspended from trading. Suncity stocks plunged by 48 per cent to HK$0.13 after the arrest of Cheok Wa. Summit Ascent was trading at US$0.15, a drop of nearly 70 per cent. 

Suncity had previously warned that if the support of some of the controlling shareholders’ contacts is lost, Chau’s arrest will have a negative impact on the group’s revenue. Alvin Chau has submitted his resignation following his arrest.