Genting Sued for ‘Accountancy Fraud’ Over Mystery $850M Debt at Bahamas Casino

Posted on: October 9, 2024, 02:26h. 

Last updated on: October 9, 2024, 02:32h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

A company that partnered with Genting on Resorts World Bimini in the Bahamas has accused the Malaysian casino giant employing “fraudulent accounting practices,” which have drowned the venture in “hundreds of millions of dollars of illegitimate debt.”

Genting Group, Genting Americas, Resorts World Bimini, RAV Bahamas, lawsuit, fraud
Trouble in Paradise? Genting’s partner in Resorts World Bimini has made some pretty serious allegations against the Malaysian casino giant in a lawsuit filed in Florida. (Image: Resorts World Bimini)

A civil lawsuit filed Monday in the US District Court for the Southern District of Florida against Genting’s US arm, Genting Americas, claims Resorts World Bimini has become a “financial wasteland” that enables the company to hide a “medley of fraudulent activities.”

These 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 suit is RAV Bahamas, a company owned by the Florida-based Capo family. In the late 1990s, RAV purchased over 700 hundred acres of land on the island of Bimini, in the Commonwealth of the Bahamas, some 45 miles off the coast of Florida.

The plan was to build a vacation destination for Floridians “bustling with homes, resorts, and restaurants, all amid Bimini’s white-sand-emerald beaches,” according to the lawsuit.

From 2002 onwards, RAV began to develop the northernmost portion of North Bimini and by 2011 had constructed the Bimini Bay resort, a collection of villas, marinas, and recreational areas.

In 2012, Genting convinced RAV to team up on a casino project that would further develop the Bimini Bay Resort. RAV agreed to form a company with Genting, BB Entertainment, which would own and develop the project, and it transferred over 20-acres of land to the new entity, per the compliant.

Resorts World Genting officially opened its doors in 2013. Today, the island-resort comprises a 10,000 square-foot casino, a 305-room hotel with surrounding restaurants, lounges, and a jetty used to dock cruise ships.

Mystery Debt

But RAV claims it has never received a penny in profits from the venture because Genting Americas controls BBE’s finances, and the company is more than $885 million in debt. For perspective, as of December 31, 2022, BBE’s liabilities were greater than the combined liabilities of Genting Malaysia and its approximately 150 subsidiaries.

“Only a massive and coordinated fraud could dump nearly a billion dollars of debt on a small island resort, where RAV had already developed most of the significant infrastructure,” argues the lawsuit, which asks for $600 million in damages.

Genting Americas buried the nearly billion-dollar liabilities in consolidated statements using vague categories of expenses to conceal the fraud from RAV,” it continues. “Genting Americas, at every turn, has deliberately kneecapped RAV’s efforts to obtain clarity into the financials, including denying RAV full access to BBE’s financial records, and denying its requests for an independent audit.”

RAV claims Genting employs a vast and “deliberately tangled” web of subsidiaries that “provide or purport to provide” services to its resorts.

“Genting Group’s opaque corporate structure, comprised of layer-upon-layer of subsidiaries, helps Genting Americas to conceal its financial improprieties and obfuscate its fraud,” claims the lawsuit.

Genting Americas had not responded to Casino.org’s request for comment at the time of publication.