RAV Bahamas Sues Genting: Claims “Massive and Co-ordinated Fraud” at Resorts World Bimini

RAV Bahamas, a minority stakeholder in Resorts World Bimini, has filed a lawsuit against the US subsidiary of Malaysian gaming giant Genting Bhd. The lawsuit, lodged in the US District Court for the Southern District of Florida, claims that Genting has transformed the venture into a “financial wasteland” by offloading nearly a billion dollars in debt onto the resort’s books.

The complaint details how Genting’s alleged actions have resulted in the devaluation of RAV’s investments, making their contributions “essentially worthless.” RAV Bahamas owns 22% of BB Entertainment, the entity responsible for operating Resorts World Bimini, and it accuses Genting of committing “massive and co-ordinated fraud” by mismanaging finances.

RAV’s lawsuit claims that Genting has systematically deprived the joint venture of profits and has obstructed RAV’s access to vital financial records. According to RAV, Genting’s practices have led to BB Entertainment accumulating substantial losses over the years. Financial statements reveal that BB Entertainment recorded losses of $151.3 million in 2022, $114.2 million in 2021, and $105.6 million in 2020, contributing to an overall debt burden that reached $885.2 million by the end of 2022.

“Only a massive and coordinated fraud could dump nearly a billion dollars of debt on a small island resort,” states a portion of the lawsuit which was reported by the Bahamas-based publication The Tribune.

It further alleges that Genting Bhd, the Malaysian gaming giant that holds a 78% stake in the resort, concealed these liabilities through vague financial categories, effectively masking the true state of the resort’s finances.

The lawsuit outlines a troubling scenario for BB Entertainment. By the end of 2022, the company had a net equity deficit of $693.7 million, indicating serious financial distress. The report from Ernst & Young, which audited the financials, raised concerns about the company’s ability to continue operating, citing a “material uncertainty related to going concern.” This assessment highlighted that BB Entertainment’s current liabilities exceeded its current assets by $70.5 million.

Genting’s alleged mismanagement appears to extend beyond just financial mishandling. RAV claims that the Malaysian firm has made it difficult for them to understand the financial realities of their partnership. They assert that Genting has refused requests for an independent audit and has not granted full access to the financial records of BB Entertainment. This lack of transparency has left RAV unable to assess the true financial health of the resort and its investments.

RAV’s lawsuit also emphasizes that Genting has attempted to sell the resort without addressing the alleged misallocations in financial records. Given that the estimated value of BB Entertainment is significantly less than the liabilities reported, RAV claims this situation has effectively rendered their contribution of 20 acres of land to the joint venture completely valueless.

The partnership between RAV Bahamas and Genting began in 2012, with RAV contributing key infrastructure to what is now Resorts World Bimini. The resort features a casino, hotel, and various amenities designed to attract tourists to the Bahamas. However, since Genting took majority control in 2015, financial troubles have mounted, prompting RAV to seek legal redress.

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