Melco Crown (MPEL) Offices Raided, Authorities in Taiwan Freeze Funds!

 I was the first to write about the filthy dealings inside Melco Crown back in July, available here, so it was quite a delight when I saw this article yesterday,

PACKER CAUGHT UP IN ASIAN CASINO RAID

A couple quotes;

James Packer-backed Melco Crown Entertainment is under investigation over allegedly illegal transfers of $170 million in gambling funds between Taiwan and Macau.

Taiwanese authorities are investigating whether MCE International, a subsidiary of James Packer’s Asian joint venture Melco Crown Entertainment, improperly channelled funds on behalf of Taiwanese gamblers.

Last week, MCE International’s offices in Taipei were searched and its bank accounts frozen in relation to the alleged transfers, according to reports.

Packer’s Australian-listed gambling company Crown has a one-third stake in Melco Crown Entertainment. He is also its co-chairman and a non-executive director.

http://www.brw.com.au/

I can’t help but wonder if this has anything to do with the recent revelation that Bo Xilai may have been using Macau to do his money laundering.  If you’re not familiar with the Bo Xilai, it’s a fascinating story. 

Briton Killed in China Had Spy Links

Wall Street Journal  November 6, 2012,

As far as how Heywood and Xilai’s laundered such large amounts of money out of the China for so long remains a mystery, but some speculate it was through Macau. 

“Chinese prosecutors building a corruption case against Bo Xilai are believed to be investigating whether the fallen politician laundered an illicit fortune through Macau”.  theaustralian.com.au/

The fact that it was the offices in Taiwan is VERY interesting.  Its odd that a company like Melco would even get involved in handling these type of transactions when  Macau claims 75% of gambling revenue is brought in from Junkets—who handle bringing in the high rollers, extending credit, and collecting debt. 

To all of a sudden start assuming this risk makes little sense unless this money actually are flows from different line of business…  A type of business which is likely the only reason certain billionaire hedge fund managers own stakes in Macau—they’re shorting china. 

More on this in the next couple days…especially as it ties back in to Harbinger Group and Spectrum Brands. 

Have a wonderful weekend,

Donald Shekels

  

Warning:  Recent Upgrades = Bankers looking to sell

Self dealing banks like Goldman Sachs and Deutche Bank obviously are anxious to find buyers for Melco Crown.  Wonder why.  Its amazing people still fall for this bullshit.

Melco Crown Entertainment Limited Upgraded to “Buy” at Goldman Sachs

Posted by Alphonse Anthony on Jan 7th, 2013

Deutsche Bank Reiterates Buy on Melco Crown Entertainment ...

Daily Political-Jan 14, 2013

Wells Fargo Reiterates Outperform on Melco Crown Entertainment ...

Jags Report-Jan 11, 2013

Pay to Play with Fitch Ratings and Harbinger Group Inc.

The ratings analysts over at Fitch must be sniffing glue or on the take, or both.  I don’t see any other plausible explanation for their failure to downgrade this disaster.

What I’d like to do is highlight events, pending litigation, and contingent factors which have been incurred over the last 12 months while Fitch has affirmed its B rating..  When you consider these points together, a credit downgrade seems way overdue.  

From November 2011 until now, Fitch has held Harbinger Group Inc rating at ‘B’.  

US-Listed Chinese Frauds…Connecting the US Hedge Funds and Banks.

Do you think it’s a coincidence that Michael Burry, George Soros, and Passport Capital—all big names from their short bets in the 2007 housing collapse-- all just happen to come across and invest in Focus Media Holdings, while all hell was breaking loose here?  For those not familiar, Focus Media Holdings is accused of being yet another Chinese fraud by Muddy Waters.

Focus Media plunges on Muddy Waters allegations | Reuters Nov 21, 2011

If you have read The Big Short by Michael Lewis, you’ll agree Michael Burry is a very intelligent guy who does his own homework.  He, like myself, actually reads through these obnoxiously long securities fillings (globally) most people ignore.   Burry was also one of the first to actually put on these CDS housing trades; and with billions in exposure and his clients breathing down his neck, do you really think he gave a fuck about a Chinese company making LCDs?

Could Steve Wynn be assisting banks in the shorting of $Wynn? Via Trust and corporate structuring, just like Hedge Funds do it? Why not? Illegal?

I just wanted to throw up a few of these corporate structures so you can get familiar with the games I think these guys are playing…I haven’t looked into Las Vegas Sands or Wynn extensively but from what I have come across as well as the cross over with Melco, I feel both are destined for steep declines. 

Steve Wynn and Sheldon Abelson have equity holders interests in mind about as much as Philip Falcone did when he manipulated and dumped Lightbridge & the package of residual housing bets that came with it on teacher pension funds.

If you follow the news about the tiff between Wynn and Kazuo Okada, how about this…they are in cahoots and this was a strategy to loosen up some shares.  Didn’t Wynn lie about getting divorced a couple years back, for the same purpose?

China Property CDO's...Merged On You're Balance Sheet...

Despite my efforts of sending my report to a large number of fund managers in Melco, global regulators, company auditors, reporters, and a good number of the Funds in the ISDA club, the stock seems little interested.