* Sands announces investigation in voluntary notice
* Latest legal action involving casino mogul Adelson
* Case dates back to 2010 dismissal of CEO Jacobs
(Adds lawyer comment, details)
HONG KONG/LOS ANGELES, Aug 1 (Reuters) - The Macau
government has launched an official investigation into Sands
China, owned by billionaire Sheldon Adelson, after the
company transferred documents linked to a wrongful dismissal
case to the United States from Macau.
It is the latest twist in a saga that has become a firestorm
for the casino mogul, who owns casinos in Las Vegas, Macau and
Singapore and is the most active donor in U.S. Republican
candidate Mitt Romney's presidential campaign.
Adelson's lawyers are due to face an Aug. 30 hearing in the
United States, where District Court Judge Elizabeth Gonzales
will decide whether Las Vegas Sands Corp withheld
financial documents in a case in which the 78-year-old is
accused of having personally approved of prostitution at the
company's casino in China's special administrative region of
Macau.
Sands, the biggest casino operator in Macau by market value,
announced the Macau investigation on Wednesday in a voluntary
notice. It did not provide further comment on the probe.
The closely watched case began in October 2010 as a wrongful
termination suit filed by Steven Jacobs, who was fired in July
2010 from his job as chief executive officer of Sands China Ltd
, Sands' Macau subsidiary.
Jacobs claims in court documents that he was wrongfully
dismissed after clashing with Adelson over what Jacobs alleged
was improper and illegal conduct, including allowing
prostitution and hiding the use of unauthorized construction
workers for the Sands China casino.
His suit triggered a federal investigation by the U.S.
Securities and Exchange Commission into its Macau operations.
Sands lawyers acknowledged to Judge Gonzales in June that
they were in possession of documents from Jacobs' computer hard
drive, after having previously said that the information could
not be produced without violating Macau data protection laws.
Last week, the nonprofit investigative-journalism
organization ProPublica reported that Sands had transferred
these documents to the United States from Macau, citing a court
filing and a deposition of Sands Assistant General Counsel
Michael Kostrinsky.
Sands lawyers now say, according to a filing, that the
documents were transported "in error" on a hard disk to the
casino's deputy general counsel in the U.S. in November 2010
without notifying Macau authorities.
The charges cast a harsh light on Adelson, the largest
individual donor to U.S. Republican candidates in 2012
campaigns. Adelson and his wife recently gave $10 million to the
Restore Our Future, a super PAC to support Romney's presidential
bid.
The company denies all the charges made by Jacobs. "These
questions will be answered in due course in the most appropriate
forum -- namely the courtroom," said Sands spokesman Ron Reese.
In March 2011, Las Vegas Sands also said it was being
investigated by U.S. authorities for potential breaches of the
Foreign Corrupt Practices Act (FCPA), which prohibits bribes to
foreign officials by U.S. companies.
Shares in Sands China fell 3 percent after the market opened
in Hong Kong on Wednesday but erased gains to trade down 1
percent ahead by midday.
GROWTH SLOWING
The latest skirmish between Jacobs and Adelson and the Macau
government investigation comes at a time when growth is sharply
slowing in the world's largest gambling destination, dealing a
further blow to Adelson's casino behemoth.
Las Vegas Sands' second quarter earnings released last week
missed forecasts, hit by lower profits at its Asian properties
that had previously been resilient in offsetting broader
economic malaise.
Macau on Wednesday said gambling revenues inched up 1.5
percent in July from a year earlier, the slowest growth since
the financial crisis in 2009 as a tropical storm reduced visitor
numbers, compounding subdued demand from Chinese gamblers.
The August hearing in the U.S. could have significant
ramifications for Sands and Adelson, ranging from a fine to a
favorable ruling for Jacobs on certain issues. The former
employee is seeking millions of dollars in salary, bonuses and
stock options.
"In general, a sanctions hearing can be a big deal in this
context," said Eli Richardson, a lawyer with Bass, Berry & Sims,
who specializes in the Foreign Corrupt Practices Act. "The court
could decide to rule in the plaintiff's favor just because the
defendant did not produce what it should have produced."
Jacobs has also alleged he was fired because he objected to
illegal demands made by Adelson, such as one involving the
hiring of Macau lawyer, Leonel Alves, a Macau public official.
Hiring Alves, who was listed as Sands China's counsel for
more than a year, could have put the company in violation of the
FCPA, Jacobs claimed. Paying a public official in any capacity
raises questions of bribery by U.S. companies abroad.
Adelson is also embroiled in other court battles, including
one in Macau where he is being sued by Asian American
Entertainment, a former business partner who is a Taiwanese
businessman known as Marshall Hao.
(Reporting by Farah Master in Hong Kong and Sue Zeidler in Los
Angeles; Editing by Ronald Grover, Chris Gallagher and Jeremy
Laurence)
