MACAU DAILY TIMES
Former Sands China chief executive officer (CEO) Steve Jacobs negotiated a deal with rival US gaming operator Harrah’s Entertainment on Cotai development sites. The revelation comes from the termination letter sent to Jacobs, which was included as evidence in a wrongful dismissal lawsuit filed by the executive.
In October, Jacobs filed a lawsuit against Las Vegas Sands (LVS), claiming he was terminated in July after disputes with chairman Sheldon Adelson. The former CEO also accuses Adelson of trying to pressure Macau Government officials.
Last week, LVS responded by asking for the lawsuit to be dropped. According to the company’s motion, quoted by newspaper Las Vegas Sun, Jacobs was fired for working on unauthorized deals and repeatedly violating company policy.
One of the accusations is that Jacobs negotiated an unspecified deal with Harrah’s for certain Cotai development plots, which could be site 3 or sites 7 and 8. The Government recently rejected Sands China’s application for the concession of plots 7 and 8. Harrah’s is the only major US gaming operator with no presence in Macau and has repeatedly shown interest in entering the local market.
The former CEO is also accused of signing an agreement with Playboy before being authorised to do so. The Playboy Club Macao opened its doors at the Sands casino last month, while a 30,000 square-feet Playboy Mansion is slated for 2012 on Cotai plots 5 and 6.
According to the termination letter, Jacobs entered negotiations and signed deals with hotel operator Four Seasons as well without prior authorisation. LVS’ second Cotai resort, opened in 2008, includes a Four Seasons hotel and branded serviced-apartments.
The company also only knew about negotiations with entertainment giant Cirque du Soleil midway through the process, the motion says. Cirque du Soleil’s permanent show ZAIA opened at the Venetian resort in July 2008 in a custom-built theatre – a MOP 1.2 billion investment.
Other reasons mentioned are: disagreeing in public with Adelson’s position on the growth prospects for Sands China; negotiating “arrangements” for Cotai plots 5 and 6 without approval; and commissioning a brand study for those sites without informing the board.
Attorneys for LVS also claimed Jacobs’ employer was Venetian Macau, so any dispute should be resolved in the MSAR. The executive’s suit “is a strategic and calculated effort to mislead this court,” LVS Sands said. “There is the potential that if Venetian Macau is not joined in this proceeding, it would be the target of future, duplicative litigation.”
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