The government of Cabo Verde has terminated its contracts with Macau Legend Development (MLD), citing “flagrant and repeated” violations of obligations tied to a $265 million casino-resort project in Praia. The announcement, detailed in the Official Gazette on Monday, signals the end of a venture that began with high hopes but has remained stalled for years.
The statement, signed by Prime Minister Ulisses Correia e Silva, claims that the breaches included the unauthorized transfer of over 20 percent of the project’s share capital and legal issues involving MLD stakeholders. “The contractual violations perpetrated by MLD occurred at various levels,” he noted in the announcement, which was reported by Portuguese news agency Lusa.
The project, spearheaded by Macau businessman David Chow, was formalized in 2015 with the laying of the foundation stone in 2016. However, little progress has been made on the 160,000-square-meter site. Current development is limited to a partially excavated islet, a connecting bridge, and an eight-story building that remains vacant.
The government’s resolution, issued by the Council of Ministers, accused MLD of failing to meet its obligations despite numerous extensions and opportunities.
“The State of Cape Verde gave MLD companies [in Cape Verde] every opportunity to resume construction works, negotiate the sale of shares, or transfer their contractual position to a potential interested party to continue the project,” the statement said, adding that no viable solutions were provided.
The government also alleged violations of gaming regulations and pointed to financial instability within MLD. It cited court convictions in Macau involving key figures at MLD, including its former co-chairman Levo Chan, who was imprisoned for illicit gambling and money laundering.
The company has also faced mounting financial challenges, reporting net liabilities of approximately HK$2.5 billion as of June 2024 and a net loss of HK$109.9 million in the first half of the year.
In response to the government’s notice of contract termination issued on August 28, MLD argued on September 16 that the Covid-19 pandemic had caused delays. The government rejected this explanation, noting that the pandemic officially ended in 2021, with no further progress made on the project since.
MLD’s leadership had previously signaled an intention to wind down operations in Cabo Verde. Chairman and CEO Li Chu Kwan stated in 2023 that the company planned to conclude its ventures in Cabo Verde and Cambodia by 2025.
Prime Minister Correia e Silva stated the need to reassess the stalled project. He added that it is necessary to reverse the concession before determining the future of this investment, which cannot remain in its current state.
The government has ordered the reversal of assets and land previously ceded to MLD as part of its efforts to regain control of the development.
Original article: https://www.yogonet.com/international/noticias/2024/11/19/85847-cabo-verde-cancels-casinoresort-contract-with-macau-legend-development-over-agreement-violations
