Genting Malaysia, through its US subsidiary Genting Americas Inc, is currently engaged in legal proceedings to dismiss a contentious lawsuit regarding its operation of Resorts World Bimini (RWB) in the Bahamas. This legal action stems from allegations made by RAV Bahamas, a minority shareholder in RWB, accusing Genting of financial mismanagement.
Legal challenge over financial management:
The dispute surfaced when RAV Bahamas, holding a 22% stake in RWB’s operating entity BB Entertainment Ltd, lodged a complaint in the US District Court, Southern District of Florida. The complaint alleges that Genting, which holds a 78% majority stake, has significantly mismanaged the integrated resort, turning it into what the plaintiff terms a “financial wasteland.”
According to RAV Bahamas, Genting has burdened the property with nearly a billion dollars in debt, severely diminishing the value of assets at RWB and consequently, the returns to shareholders. The allegations describe these actions as tantamount to fraud, drastically devaluing the contributions of RAV Bahamas and obstructing profit distributions.
In response, Genting Americas Inc has sought to dismiss the lawsuit on several grounds. The primary argument presented is that this dispute is inherently a shareholder issue, which should be resolved according to the Shareholders’ Agreement within a designated forum outside the US courts. According to Inside Asian Gaming, Genting’s filing highlighted that the claims are “time-barred” and criticized the lawsuit for failing to “adequately allege facts showing that the required elements for each claim have been met.”
Genting’s position remains firm as they regard the lawsuit as “baseless and without merit,” with intentions to vigorously defend against the accusations. They have characterized the legal claims as malicious, suggesting that the lawsuit is an attempt by RAV to secure an unwarranted large financial settlement.
Background of the Resorts World Bimini joint venture:
The joint venture that now faces scrutiny was established back in 2012 when RAV Bahamas and Genting aimed to develop the Bimini Bay area. Initially a 50/50 partnership, the venture saw RAV contributing 20 acres of land for the development, which Genting later took over in 2015, transforming the site into a luxury resort featuring a 10,000 square-foot casino, over 300 hotel rooms, multiple dining venues, lounges, and a cruise ship jetty.
The ongoing lawsuit poses several implications for Genting Malaysia, though the company has stated it does not foresee any material impact on its financial results or operations from the ongoing claims. This legal battle underscores the complexities of managing large-scale international joint ventures, especially in the volatile sector of casino and resort management.
As the case progresses, the outcomes could influence future governance and financial strategies not only for Genting’s operations in the Bahamas but potentially for similar partnerships and projects across the industry.
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Vanja Mitic 2024-11-26 14:02:20
