Under-Fire Owner Selling Les Ambassadeurs To Former Hong Kong Associate

London's Les Ambassadeurs Club is to be sold for the third time in four years, with owner Paul Suen heavily discounting the Mayfair icon to another Hong Kong entity helmed by a former colleague, while also facing charges of withholding inside information. 

Paul Suen Cho Hung’s wholly-owned company United Time Corporation Limited has offered the Mayfair casino for a knockdown price of £128m ($162m), a little more than half the £244m he paid Landing International for the venue in October 2017.

Suen, the owner of English Championship football club Birmingham City FC, will sell the property to non-gaming company Imagi International Holdings Limited, according to an Imagi term sheet filing to the Hong Kong Stock Exchange.

Completion of the transaction will follow due diligence and Imagi shareholder approval of the takeover, the filing said. 

“The acquisition of the target company is an exceptional opportunity to gain a foothold in the exclusive London casino market,” it said, describing Les Ambassadeurs as “an attractive investment asset as it caters to an exclusive clientele in a niche industry with high barriers to entry that is more resilient throughout an economic cycle”.

Imagi International Holdings Ltd is a once thriving computer animation company that lost its way after poor box office returns and a 2015 scandal involving its former chairman, who disappeared in China before being jailed.

Imagi later shifted its focus to investment business such as corporate bonds, securities trading and money lending.

But key minority shareholders of the company have a strong gaming interest.

Imagi’s largest minority shareholder is Satinu Markets Ltd, which holds 44.7 percent of the company. Satinu Markets is a broker that holds a majority stake in Landing International Development on behalf of Landing chairman Yang Zhihui that was frozen by Hong Kong's Securities and Futures Commission (SFC).

Another minority shareholder (8 percent) in Imagi is Kingston Securities Ltd, part of the Kingston Financial Group, which owns two Macau casino hotels and helped to fund Landing International’s reverse merger on the Hong Kong bourse.

An Imagi filing on March 22 this year said the company reported a loss of HK$119m ($15m) in 2018, following a loss of HK$441m in 2017. Total equity attributable to the owners of the company fell from HK$780m to HK$665m in the same period.

The near halved sale price of Les Ambassadeurs led one London casino industry insider to ask: “Do the fluctuating vales of these sales not raise eyebrows?"

The Hong Kong filing states that Suen and United Time Corp are independent third parties in the transaction. However, stock exchange filings dating to 2014 show that Paul Suen was a board colleague of both the current Imagi acting chairman and a former Imagi director implicated in an inside information case.

That regulatory action casts a shadow over Imagi’s intended purchase of Les Ambassadeurs, as Paul Suen faces suspicion of insider information breaches at Hong Kong-listed Mission Capital Holdings while he was chairman.

On April 29, a little over two weeks before Suen’s term sheet with Imagi was finalised on May 17, Hong Kong’s Market Misconduct Tribunal held a preliminary hearing into an SFC complaint that CMBC Capital Holdings — the current name of Mission Capital — and six of its directors breached disclosure requirements in 2014.

Substantive hearings for the case are not scheduled until April 2020, according to the Market Misconduct Tribunal website. Suen did not respond to a GamblingCompliance request for comment.

Suen was one of the six former directors named in the December 18 complaint, along with his namesake and then Mission Capital CEO Philip Suen Yick Lun.

Philip Suen went on to become a director of Imagi before resigning in August 2016.

Another, and the most current, link between Imagi and Paul Suen’s term as Mission Capital chairman is Imagi’s current acting chairman Osman Bin Kitchell, a Canadian national, who signed last month’s filing confirming the move to acquire Les Ambassadeurs.

Kitchell joined the Mission Capital board on January 1, 2015, after the events under investigation by the Market Misconduct Tribunal took place. He resigned after only seven months, and is not a defendant in the case.

In recent years, Imagi International has had a torrid time.

Former chairman Shan Jiuliang and non-executive director Wen Di were reported missing in late 2015 and eventually removed from the board the following year, along with Shan’s wife Zhang Peng, after it emerged that Shan had been detained in China.

The absences triggered a radical change in the Imagi board line-up, while Shan was eventually sentenced to an 18-year prison term in the city of Kunming on March 22 this year over embezzlement at a metals exchange that he founded in 2011.

But just days ahead of the Les Ambassadeurs term sheet finalisation and purchase announcement, the Imagi board gained a significant political boost, with leading pro-Beijing Hong Kong legislator Chan Hak Kan being appointed as an independent non-executive director on May 10.

Chan is a three-term member of the Hong Kong Legislative Council, and vice chairman of the pro-Beijing Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), as well as a deputy convenor of the pro-Beijing majority in the legislature.

He is also a former assistant to the Hong Kong Chief Executive, the territory’s highest office, and a member of the Xiamen City branch of the Chinese People’s Political Consultative Conference (CPPCC).

As for Les Ambassadeurs, the casino’s fortunes have turned around under Paul Suen, and the most recent Companies House accounts state that it made a £15.6m profit in 2018. Its annual accounts state the owners were planning major investments in staff and services.

The casino, one of London's most exclusive venues, has also endured a turbulent spell in recent years. 

Former auditors PricewaterhouseCoopers (PwC) resigned in September 2018 following a disagreement with the club's owners.

Les Ambassadeurs said that food, drink and concierge services, along with gaming revenue, were both a provision of services and required no additional disclosure, a position that PwC objected to strongly enough to stand down.

In August 2017, the previous owners sued Singaporean high-roller Azam Kolia for bouncing £470,000 worth of cheques following an attempt to convince them to reduce his losses. Kolia was down £2.4m in a single night, a London court heard.

The sale of Les Ambassadeurs comes on the heels of another iconic high-end London casino changing hands, with the £23m sale of the former Clermont venue in April to investment banker and Asian real-estate doyen Christian Huot.

A third high-end London casino, Maxims, was also sold earlier this year after under-performing for its Asian owners Genting. Canadian group Sonco Gaming bought the casino for about £35m, its first UK purchase.

After a period of relative stability, four high-end London venues flipping in under two years is less down to property market forces and more down to regulatory pressure, said a lawyer with knowledge of the Les Ambassadeurs sale. 

“It's no coincidence since the new anti-money laundering regulations came into force some of these venues are finding it tougher and tougher to keep their most valued clientele happy,” the lawyer said.

“London's high-end scene is being squeezed; there is added competition from emerging markets like Australia and Cambodia, along with the likes of Macau and Vegas, of course.”

The latest UK Gambling Commission data shows table drop is down 22 percent, falling below £2bn, and table win is down 31 percent at high-end London casinos in the year to March.

Les Ambassadeurs timeline
  • 2006: Sold by London Clubs to Indonesian tobacco tycoon Putera Sampoerna for £115m.
  • December 2015: Landing International buys casino for revised price of £131m.
  • October 2017: Landing International sells casino to Paul Suen for £244m.
  • September 2018: Auditors PwC resign following a disagreement with Les Ambassadeurs’ owners.
  • December 2018: Hong Kong’s SFC issues complaint against Paul Suen and five fellow former directors.
  • April 29, 2019: Market Misconduct Tribunal holds preliminary hearing into the Suen case.
  • May 10, 2019: Imagi International appoints key pro-Beijing Hong Kong legislator to its board.
  • May 17, 2019: Casino purchase term sheet finalised.
  • May 20, 2019: Imagi International announces intended purchase of Les Ambassadeurs for £128m.

Additional reporting by Andrew Gellatly.