Legend International Resorts Ltd. (LIRL) chief executive officer Khoo Boo Boon claimed the government closed down Legenda to favor another investor group, which now runs Subic Diamond Casino.
Khoo said this was uncalled for because there was a provision in the contract it signed with the Philippine Amusement & Gaming Corp. (Pagcor) that LIRL had the exclusive right to operate a casino within the Subic Bay Metropolitan Authority (SBMA) area.
He claimed Subic Diamond Casino was not even required to pay a monthly "guaranteed payment" unlike Legenda.
Pagcor ordered the closure of the Legenda last May after it claimed LIRL had failed to remit the 15 percent share of its revenues as prescribed in its license to operate.
Khoo, however, said LIRL had been losing money since 1999 because of the Asian financial crisis, leading to the filing of a petition for suspension of debt payments and/rehabilitation with the Olongapo City Regional Trial Court in November 2004.
In 2000, despite negotiations to address the issue, Pagcor and the SBMA threatened to cancel the license and close down the casino operations of LIRL unless it agreed to further amendments of its memorandum of agreement with the government.
Pagcor and SBMA allegedly demanded that LIRL pay a minimum of P5 million a month to each as guaranteed payment, regardless of whether the casino was earning income from its operations.
Khoo said his group eventually agreed to the amendments of the original agreement with Pagcor because of political pressures and concerns the company would lose its $130-million investment in Subic.
Khoo said it is open to a settlement with Pagcor only if the state-run gaming firm will keep its word and respect the rule of law.
Hobbled by its ability to meet maturing obligations, LIRL filed debt relief to prevent creditors from instituting foreclosure proceedings against its assets. Its debts reportedly now amount to P7.03 billion, P3.72 billion of which are owed to local creditor banks.
LIRL also owes the government about P1 billion, representing the state’s share in the firm’s casino operations in Subic Bay Freeport Zone.