Ben Lee
An Australian company with only AUD6 million (MOP36.6 million) in net assets appears to be the favorite candidate of officials in the country’s Gold Coast area to build an AUD3 billion integrated resort.
The Queensland local government is consulting local communities over the possibility of a second casino on the Gold Coast, but appears to favor ASF Group, which is suspected of being financially backed by the Chinese government.
“ASF says it has wealthy shareholders in China [but] the Australian Stock Exchange-listed company is a minnow,” noted a report by the Australian Broadcasting Corporation, which broke the story on its nightly current affairs program, 7.30. “Its half-yearly report records revenue of AUD430,000.”
The report speculated that the Chinese government might be a source of funding for ASF, through state-owned company China State Construction Engineering Corporation.
“It is unusual for such a skinny [undercapitalized] company to come forward for an investment like this,” Ben Lee, managing partner at IGamiX Management & Consulting, told the Times.
“They [ASF Group] must have put forward the idea [to authorities] that they are backed by the Chinese government.”
The mysterious deal has other unaddressed issues, including a lack of clarity on how many poker machines will be installed and who will operate the casino.
In an interview with 7.30, ASF Group director Louis Chien was evasive when pressed for answers, responding that “projects of this size and scale are very complex and therefore they have very complex commercial structures.”
ASF Group claims on its website that it is a “new driving force in strategic investment between China and Australia.”
“We facilitate two-way cross-
border investment between Australia and China. So in essence, we are an investment incubator,” Chien said in the television report.
“We’re a tourist city: tourist-
built, tourist-driven. This is the next tourist infrastructure for the city. Why don’t we just get on with it?”
ASF is in talks with Queensland authorities to build a casino and residential project, called the Broadwater Marine Project, adjacent to the Sheraton Mirage.
The report said ASF has been negotiating with Crown Resorts for more than a year, but has yet to reach an agreement.
Chinese companies, especially those backed by the government, have embarked on an overseas investment program which includes mergers and acquisitions of non-Chinese corporations. In terms of worldwide investment, these companies have been targeting sectors such as technology, media and telecommunications, agriculture, energy and mineral resources.
The investment has sparked concerns over the strategic influence of the Chinese government in other countries, especially in transportation infrastructure and financial institutions.
However, Lee believes the concerns may be unfounded.
“Typically, anything that is considered a ‘national interest’ can be blocked,” he said, referring in particular to two separate bids last year for stakes in an Australian electricity distribution network and a collection of cattle ranches comprising an area larger than South Korea.
“All it takes is an act of [the Australian] parliament to nationalize these industries,” he said, adding that “while they [the investors] might be compensated, not necessarily at the price they want.”
According to the Chinese government, direct investment in Australia from China grew by more than 50 percent year-
on-year in 2016 to AUD4.8 billion. Much of this came with the backing or indirect financing of the Chinese government, and targets key sectors such as real estate and transportation. However, aside from property and transportation, the Chinese have also expressed interest in ports and farms – and now casinos.
While gambling is officially illegal in China, the government operates two lotteries and has, in principle, approved the idea of Hainan Province as a “testing ground for China’s lottery and gambling industry”, with the potential for casino development.
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