Sands China Ltd, controlled by billionaire Sheldon Adelson's casino company, said Thursday it's being investigated by the Securities and Futures Commission (SFC) for alleged breaches of regulations.

Sands China slid the most in four weeks in Hong Kong trading after it said in a statement that it was "requested to produce certain documents". Jacqueline Wu, a spokeswoman for the Macao casino operator, and Ernest Kong, a spokesman for the Hong Kong regulator, declined to comment.

Controlling shareholder Las Vegas Sands Corp on March 1 said it received a subpoena from the US Securities and Exchange Commission to produce documents related to its Macao operations' compliance with the Foreign Corrupt Practices Act. Steven Jacobs, fired as Sands China's chief executive officer last year, claimed Las Vegas Sands demanded he use improper "leverage" to win government concessions, according to a complaint he filed in the US state of Nevada.

"When the smoke clears, I am absolutely, not 100 percent, but 1,000 percent positive that there won't be any fire below it," Adelson said, referring to the US probe, at a March 28 JPMorgan conference in Las Vegas.

Sands China fell 5.7 percent to HK$17.36 at the close of trading in Hong Kong, paring its gain over the past year to 41 percent. The benchmark Hang Seng Index rose 0.3 percent Thursday.

"The incident is hurting investor sentiment," said Credit Suisse Group AG analyst Gabriel Chan. "If the investigation is an extension to Steven Jacobs, it will not be a big issue in the short term. Now the issue is we need to find out is if there is anything new."

The world's biggest casino operator by market value is "cooperating with the investigation", Adelson, Las Vegas Sands' chairman and chief executive officer, said at the March 28 briefing.

"They want to get all my e-mails," Adelson said March 28. "I don't have a computer. And I don't use e-mails. I'm not an e-mail type of person."

The US Justice Department started a similar probe, Las Vegas Sands said in regulatory filings.

The Foreign Corrupt Practices Act prohibits US companies and their intermediaries from making improper payments to foreign officials to win or retain business.

Las Vegas Sands' request to dismiss Jacobs' case was rejected March 15 by state court Judge Elizabeth Gonzalez. Lawyers for the casino company argued the case should be heard in China.

The Las Vegas-based company posted profit of $599 million last year, compared with a loss of $354 million in 2009.

Total casino revenue in Macao surged 58 percent last year to 188 billion patacas ($23.5 billion), quadruple that of the Las Vegas Strip, according to government data.

Sands China said in July that Jacobs was fired by the board from his position as chief executive officer, without specifying reasons. Jacobs sued his former employer in October in a Nevada state court, alleging breach of contract.

Among Jacobs's claims were that Las Vegas Sands told him to retain a lawyer who was part of the Macao government and that he misled the board.

Las Vegas Sands owns at least 70 percent of Sands China, according to data compiled by Bloomberg.

Bloomberg

(HK Edition 04/01/2011 page4)