Saturday, 2 June 2012

Where's the Money?

The Venetian in Macau is bigger than the one in Sin City
A good indication China's economy is slowing down is to look at Macau's casino tables.

The gambling capital's revenues only rose 7.3 percent to 26.08 billion patacas last month, the slowest growth since July 2009.

This has led to Macau gaming stocks falling slightly on Friday.

"One of the main reasons is the slowdown in VIP revenue. I do not rule out the possibility of a slowdown in the China economy as a factor," said a Hong Kong stock analyst.

It could also be that the casinos haven't collected all the debts from their VIP customers, at least two of them come from mainland Chinese banks.

Yang Kun, an executive vice-president of Agricultural Bank of China, was detained a few days ago in Beijing by the Central Commission for Discipline Inspection of the Communist Party of China.

It was because the commission received complaints about illegal gambling activities in Macau that were linked to Yang, as well as the misuse of a bank client's account.

The amount of money he allegedly misused is unclear, but one source said: "It must be a big case involving big money, given the high level of Yang's position and the quick action taken by the government. He was internally advised not to travel abroad, even just a trip to Hong Kong."

Another source said Yang went to Macau several times with business friends and the group lost money during at least one gambling trip there. Because Yang and his friends owed large sums to the casinos, complaints emerged and later came to the attention of the anti-corruption commission.

Yang had worked at Agricultural Bank of China for more than 20 years and was considered a rising star...

Meanwhile another banker was also caught for similar allegations.

Brand manager He Juxin of China Minsheng Bank was detained by police in Beijing as he is linked to Yang's case.

Both He and Yang are believed to have close ties to a businessman named Wang Yaohui, chairman of conglomerate Zhonghui Guohua Industry Group.

In addition to being Minsheng Bank's top executive in charge of brand and marketing, he is also the director of the Minsheng Art Museum, which was established and funded by the bank to collect and exhibit valuable artwork.

Apparently He and Wang share an interest in art; sources also said Wang, with Yang's help, obtained loans from Agricultural Bank of China to shore-up money-losing property projects in Beijing and finance the chairman's personal hobbies, including gambling and buying art.

Now that the three are being investigated, how many others have fallen into similar situations?

It's only a matter of time before more debts will be revealed and increasing indications that Beijing must really clean house and rid itself of corruption and graft for good.

It can't keep functioning as it is right now forever... can it?

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