Partner of Genting Files $600million Lawsuit Accusing "Extensive and Collaborative Fraud"
Genting Bhd Faces Lawsuit Over Alleged Liability Dumping on Resorts World Bimini
In a significant development, Genting Bhd, the Malaysian multinational conglomerate, is facing a lawsuit from RAV Bahamas over allegations of burdening Resorts World Bimini (RWB) in the Bahamas with billions of dollars in liabilities. The lawsuit, filed by RAV Bahamas, claims that Genting Bhd's subsidiary, Genting Americas, has used BBC Entertainment, the partnership responsible for developing RWB, as a financial wasteland.
The partnership between BBC Entertainment and Genting Bhd was initially a 50/50 venture in 2012 to develop RAV's Bimini Bay property. The Resorts World Bimini was constructed on land owned by RAV, with Genting taking over majority control later on. However, the lawsuit alleges that Genting has dumped over a billion dollars of liabilities onto the RWB property, resulting in a total of $885.2m in partnership liabilities.
RAV Bahamas owns 22% of the RWB operating entity BBC Entertainment, while Genting Bhd owns the remainder. The lawsuit states that BBC Entertainment has not distributed any profits to RAV due to Genting Americas controlling BBC Entertainment's finances. RAV is seeking damages of over $600m from Genting.
The lawsuit further alleges that Genting Americas has used BBC Entertainment to conceal a medley of fraudulent activities. The auditor of BBC Entertainment has expressed doubts about the future of the partnership, and BBC Entertainment recorded a $151.28m loss for the year ending Dec 31, 2022, an increase from 2021 losses of $114.2m.
In response, Genting Americas has stated it will vigorously defend against the lawsuit, viewing it as baseless and without merit. The company has also said it will comment further as the situation develops.
The RWB property is a 10,000 square-foot casino with 305 hotel rooms, multiple restaurants and lounges, and facilities for docking cruise ships. The estimated value of BBC Entertainment's resort is substantially less than the approximately US$900 million in liabilities that remain on BBC Entertainment's financials.
This legal battle is expected to unfold in the coming months, with significant implications for both Genting Bhd and RAV Bahamas, as well as the future of Resorts World Bimini.
