Adding to a broad list of western companies that are suspending Russian operations in wake of the Ukrainian conflict, Malaysian billionaire Chen Lip Keong has put a pause on his under-construction resort and casino project in Vladivostok. The hospitality entity was owned and operated by NagaCorp, which is listed on the Hong Kong stock exchange. The company owns and operates primarily in Cambodia where it enjoys a sovereign guaranteed monopoly till 2035.
While the company did not explicitly mention the ongoing military conflict with Ukraine as the reason behind this move, analysts are of the opinion that the move is a reaction to the international sanctions imposed against Russia. There is speculation that given the company’s fragile condition it might consider selling this project.
In a filing made to the stock exchange on March 3, the company said, “The board of directors (the “Board”) of the Company announces that, in the interest of the Company and its shareholders as a whole, the Company is surrounded by various uncertainties in respect of the Group’s gaming and resort project in Vladivostok, Russia (the “Project”), the Company would like to invoke the force majeure clause set out in the investment agreement and suspend its performance thereunder.”
“Hence, the Company would like to suspend the development of the Project indefinitely until the circumstances are clearer. The Company will issue further announcement(s) when appropriate and necessary,” it added.
The pullout of Russia comes as market sentiments remain grim with the Russian stock market suffering a crash and the rouble losing more than 30% of its value. Foreign assets of the Russian central bank have been frozen by the US-led western alliance.
The Kremlin too admitted that the economy was going through unprecedented shocks for the first time since the 1990s when the economy gradually started to integrate with the West. Major rating agencies have warned that Russia along with its neighbor Belarus is at the risk of defaulting on its sovereign debts.
But in an offensive against this move by businesses to move out of Russia in fleets, Russia is exploring seizing all assets of these companies as a retaliatory measure.