We read with interest the recent report in the news about the woes our two integrated resorts are having.

The Reuters report, carried in Yahoo! Singapore, stated that in the three years since the casinos were allowed to open in Singapore, several Chinese nationals who were VIP gamblers racked up millions of dollars in debt before running back to China. The report further states that the casinos are having trouble suing these foreigners for the debt, as they are effectively untouchable in their homeland. This is due to a combination of inability to enforce judgments, differences in legal systems and a less-than-cooperative foreign government.

Integrated Resorts, Resorts World Sentosa, RWS, Marina Bay Sands, MBS

When we first published the article 45% Foreigners – The Perfect Property Storm For Our Banks and Nation, claiming that foreigners who buy property here had an “escape route” should things turn bad, online commenters questioned our motives. They believed that we were unfairly targeting foreigners, and trying to pin the blame on them for all Singapore’s woes.

This is hardly the case. We simply made the observation that foreigners have an option that normal Singaporeans don’t have, unless they are prepared to forsake their homeland. While not exactly the best or most wholesome example, the casino situation shown above certainly illustrates that some of them will have no qualms about taking advantage of such loopholes.

Think about it. A billion-dollar company, chasing millions in debt, is left with no recourse when trying to recover said debt from overseas. How would lesser companies and individuals fare when they need to recover debts?

It’s not just gamblers who resort to such tactics either. One of our colleagues who used to work in a bank also witnessed a similar incident first-hand. A senior bank executive racked up a nice line of credit with multiple banks and financial institutions in Singapore while working here. When his time in Singapore came to a close, this high-flying executive literally flew off without paying off his debt, which amounted to a tidy six-figure sum. To date, the defrauded banks and financial institutions are still, together with their appointed legal firms, unable to realistically recover those debts. This person is from a developed, first-world country, demonstrating that it really doesn’t matter where one is from, or what social standing one has; anyone with such an escape route could be easily tempted to take it, probably more so if the sums owed are substantial.

As for the consequences of such actions, well, the loss to casinos is probably a small fraction of the billions of revenue they earn, but we cannot say the same for the banks that loan money to foreigners for the purposes of buying property here. A foreigner mix of 45% as outlined in the 6.9 million population White Paper would further add to the strain. Should something trigger an exodus of foreigners, who in the process default on their loans or rental obligations, the shock to Singapore’s financial system may well be more drastic.

While it may appear that our earlier article is unneccessarily pointing fingers at our foreign guests in Singapore, this is simply not true. We do know many foreigners in our daily life and work, and we recognise that many, if not most are respectable professionals with much to contribute. However, we are also trying to highlight this additional risk factor that could have catastrophic results in our property and finance sectors.

Do you have similar experiences,stories or opinions of your own to relate? Comment below if you have further thoughts on this matter. You can also like or follow us on our FacebookTwitter, and Google+ pages for our latest updates.


  No Responses to “Will Casino Defaults Be Repeated at Banks?”

 Leave a Comment