‘$30M deposit by May 5 or you’re out’

Gov. Eloy S. Inos clarified yesterday that the two casino applicants would have to deposit $30 million each in an escrow account by May 5, or lose the privilege to be further considered for a grant of a license to exclusively develop a casino resort on Saipan. This, as new details about the ownership of Marianas Stars Entertainment Inc. emerge, one of the two Saipan casino applicants along with Best Sunshine International Ltd.
“Essentially, if only one company deposits $30 million, then I guess that’s the end of the line,” the governor said in an interview at yesterday’s Marianas March Against Cancer proclamation signing.

The applicant that is not chosen gets its $30 million back.

The other $30 million will be used to restore retirees’ deferred 25 percent pension.

Lottery Commission chair Sixto Igisomar separately said yesterday that the committee will issue an advance public notice of the date and time of the panel’s first meeting next week to tackle the casino applications.

The governor said the commissioners got their copies of the applications submitted. Because of a non-disclosure agreement, the government is not releasing any portion of the applications.

Who are the applicants?

Marianas Stars Entertainment Inc., an indirect subsidiary of Chinese Strategic Holdings Ltd., plans to build a 2,000-room hotel including dining and shopping facilities in addition to developing a casino, Saipan Tribune learned.

Only 25 percent of Marianas Stars is owned by Mega Stars Overseas Ltd., the new owner of Tinian Dynasty Hotel & Casino, based on an announcement by the Chinese Strategic Holdings Ltd. pursuant to Hong Kong laws.

Cario Hon, chief executive officer of Mega Stars, earlier did not deny that Marianas Stars is only “partly” owned by Mega Stars.

Owning 75 percent of Marianas Stars is Famous Treasure Ltd., a company incorporated in the British Virgin Islands and a wholly-owned subsidiary of Chinese Strategic Holdings Ltd.

In its April 22 announcement, Chinese Strategic Holdings Ltd. said Marianas Stars paid the nonrefundable $1 million application fee to the Commonwealth Treasury on “17 April 2014,” four days before the April 21 deadline.

“There is no guarantee that the Application by MSE [Marianas Stars] will be successful and that the proposed development mentioned above will proceed. In addition, even if MSE were successful with the application, there could be other factors that may affect the success of the proposed development. Investors should exercise caution when dealing with the securities of the company,” Chinese Strategic Holdings said.

Marianas Stars is incorporated and licensed to do business in the CNMI.

The other applicant, Hong Kong-based Best Sunshine International Ltd., is a wholly-owned subsidiary of First Natural Foods Holdings Ltd. It has not been incorporated in the CNMI nor has it applied for a business license in the CNMI as of yesterday.

The governor met with members of the Lottery Commission on Wednesday afternoon, mostly on housekeeping matters.

“We also emphasized this is an important task and that they’ll have to clear their calendar or make arrangements so they can really focus on this work,” Inos said in an interview.

Rep. Lorenzo Deleon Guerrero (Ind-Saipan), one of those who voted “yes” to the Saipan casino bill, said yesterday that the Lottery Commission should be allowed to do its job as required by law.

“And the commission should carefully review and investigate the companies, do background checks on them. Who are the companies and people involved in these investments?” he said.

The governor said the government will hire an investigator with expertise in probing casino operations. The investigator could be based in Hong Kong, Macau, or mainland China.

Casino gaming used to be legal only on Tinian and Rota. That changed on March 21 when the governor signed the casino bill.

An investor granted a license to exclusively operate a casino on Saipan is required to build a hotel-resort with at least 2,000 rooms and an initial investment of $2 billion.