US gaming tycoon Sheldon Adelson's Macau-based subsidiary Sands China said Wednesday it is under investigation over the transfer of data from the Chinese territory to the United States.
The Hong Kong-listed company issued a statement to the stock exchange confirming that it was being probed by Macau authorities for allegedly sending information out of the territory without official approval.
The statement comes amid allegations in the United States from a former executive that the company approved inappropriate payments to a Macau lawmaker, a possible breach of the US Foreign Corrupt Practices Act.
Sands China said its subsidiary, Venetian Macau, had been informed by Macau's Office for Personal Data Protection (OPDP) that it was the subject of an official investigation related to the alleged transfer of "certain data".
"The company is unable to comment further at this time," it added.
An OPDP spokesman in Macau confirmed that Venetian Macau was under investigation, but could provide no further details.
With personal wealth reported at $25 billion, Adelson has emerged as a major donor to Republican presidential hopefuls, first backing Newt Gingrich and later Mitt Romney.
His expansion into Macau has reportedly attracted the attention of US authorities after sacked Sands China executive Steven Jacobs launched a wrongful dismissal suit in a Nevada court two years ago.
Jacobs has claimed he was told to cover up suspicious payments to a Macau lawmaker who had acted as a legal consultant to Sands China, and that Adelson had turned a blind eye to prostitution at his lucrative Chinese casinos.
Adelson has denied the allegations and describes Jacobs as a disgruntled former employee.
Sands China is a key, money-making subsidiary of Adelson's Las Vegas Sands Corp, one of the biggest gaming companies in the United States.
Las Vegas Sands has resisted providing US authorities with documents related to Jacobs' employment, citing Macau privacy laws which carry fines for the transfer of data to territories lacking adequate personal data protection.
But ProPublica website earlier this month reported that Sands China had copied information from its offices and sent it to the United States shortly after Jacobs was sacked in mid-2010.
The judge hearing Jacobs' civil suit has complained in court about "the lack of forthrightness with respect to these documents that were taken out of Macau many years ago and which nobody's told me about," ProPublica reported.
Sands China shares leapt 2.18 percent to HK$23.45 in Hong Kong on Monday, as investors shrugged off news of the investigation and hunted bargains following the stock's recent falls.
The stock is down more than 28 percent from its 2012 high of HK$32.70 set on April 19, tracking weakness in Macau gaming stocks due to fears of a slump in revenues from Chinese high-rollers amid slowing economic growth in China.
Sands China last week said its second-quarter net profit fell 40 percent to $160.5 million compared to $267.4 million the previous corresponding period.
The profit fall was largely due to a $100.8 million non-cash impairment loss on two parcels of land and increased expenses related to the April opening of Cotai Central, a $5 billion resort, the company said.
Semi-autonomous Macau, the only part of China where casino gambling is legal, overtook Las Vegas as the world's gaming capital in terms of revenue after the sector was opened to foreign competition in 2002.