Oleg Drozdov facing allegations of US$11 mln ‘malpractice’ in unrelated solid waste scheme
Summit Ascent Holdings Ltd – a company said in filings to be controlled by Macau casino developer Lawrence Ho Yau Lung – has confirmed to the Hong Kong bourse that an indirect partner in a Russian casino project has been arrested by police in that country.
A Russian newspaper, Kommersant, reported on November 7 that Oleg Drozdov had been detained for investigation by Russian law enforcement. It’s reportedly regarding alleged malpractices by a business called OOO Vladivostokservis and relates to the construction of a solid waste treatment facility in Vladivostok in the Russian Far East.
The investigation relates to events in 2009 and 2010 and is said to involve 367 million roubles (US$11.2 million, or 89.72 million patacas). The company OOO Vladivostokservis was reported to have been the general contractor on the waste treatment facility and Mr Drozdov served a director of the firm at the relevant time.
Summit Ascent stated in yesterday’s filing: “Management of the company has since spoken to Mr Sergey I Bondar, attorney advocate acting for Mr Drozdov, who has confirmed that Mr Drozdov has been detained for questioning by the Russian law enforcement authorities.”
In earlier filings Summit Ascent said it was paying US$9.02 million for 46 percent of an entity called Oriental Regent Ltd. The latter is a holding company that currently owns 50 percent of First Gambling Company of the Far East LLC. First Gambling in turn has a gaming licence in Primorye, the Russian Far East province of which Vladivostok is the capital.
Previous filings also said that Lawrence Ho’s primary investment vehicle Melco International Development Ltd – which also holds a stake in Macau casino developer Melco Crown Entertainment Ltd – would pay US$980,392 for a five percent stake in Oriental Regent.
Mr Drozdov is an indirect minority shareholder in Oriental Regent. He controls 30 percent of it via Elegant City Ltd, a British Virgin Islands company that is in turn wholly owned by Mr Drozdov.
No impact
Summit Ascent stressed yesterday that the investigation into Mr Drozdov “does not relate, in any way, to the Primorye gaming project or to Oriental Regent or FGCE [First Gambling Company of the Far East]”. Summit Ascent added the investigation was in progress and no charges had so far been made against Mr Drozdov.
It stated: “The company has also received direct assurances from Mr Sidorov, first vice governor of the Primorsky Administration, which administers the Gambling Zone of the Primorye Region, that the investigation and allegations relating to Mr Drozdov will not, in any way, affect the Primorye Gaming Project or the company’s investment in the Primorye Gaming Zone.”
The estimated total investment for the first phase of the casino resort complex to be constructed at an ‘Integrated Entertainment Zone’ in Primorye – next door to China’s northeastern Heilongjiang province – is about US$130 million according to earlier filings.
It will have a 119-room hotel, approximately 800 slot machines, 25 VIP gaming tables and 40 mass-market gaming tables, according to the previous statements.
Business Daily asked Melco International for a comment but got no response by press time.
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