500.Com Shares Tank As Investigations Into Japan Casino Bribery Widens

500.Com Shares Tank As Investigations Into Japan Casino Bribery Widens

It is not only the credibility of Japan’s ruling party that is being questioned by the opposition but following the arrest of Tsukasa Akimoto and amidst widening investigations the confidence of investors in Chinese gambling company 500.com has also begun to dwindle.

As the reports of other lawmakers being involved surfaced in the Japanese media on Thursday, Nasdaq listed 500.com’s shares tanked. By mid-day, the gambling operator’s shares slipped by about 11 percent.

500.com has already formed a Special Investigation Committee (SIC) to “internally investigate alleged illegal money transfers and the role played by consultants” as a part of its initiative to ensure transparency and to disentangle the roots of the casino bribery scandal that’s been making headlines since Christmas.

It all started after the investigating authorities in Japan conducted a raid on the ruling party lawmaker Tsukasa Akimoto’s office and then arrested him on suspicion of having taken bribes from the Chinese gambling operator. While Akimoto has denied allegations, the investigation has widened and now reports have emerged in the local media that claim at least other lawmakers were also bribed.

Akimoto was a deputy minister and in charge of the government’s casino gambling policy. It is alleged that he was bribed as the casino operator sought favors in the licensing process from the lawmaker.

Following the arrest of Akimoto, the authorities also raided a Pachinko operator’s office and have also arrested 500.com executives.

The company’s chairman Xudong Chen has already resigned on December 30. However, the gambling operator in a statement said that the chairman’s resignation was “not based on any disagreement with the company on any matter related to its business, finance, accounting and/or any other affairs.”

In the meantime, Chen will be replaced by Shengwu Wu, executive VP of Chinese state-owned Tsinghua Unigroup who owns over 30 percent of the company’s shares.

The company’s director/CEO Zhengming Pan has also confirmed to have been temporarily stepped aside from his position. The company said that he will not be in his position within the company until the SIC concludes its investigation.

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