Sunday, May 22, 2022

Cambodia probe could cost Tabcorp upwards of A$120 million; CLSA

The Cambodian bribery allegations could cost Tabcorp up to $120 million (US$90.4 million) in costs and penalties, according to Sydney Morning Herald quoting a CLSA report.  

The brokerage firm says while in Australia, very few cases of this type make it to trial, while in the US there is a higher chance of a negotiated settlement.

"In Australia, the maximum penalty would be A$17 million whilst in the US most cases end via a plea bargain and settle out of court, but the legislation and sentencing guidelines also take into account the benefits obtained," said the brokerage firm.

Around $120 million in costs and charges will be incurred should charges be laid, said CLSA.

Analysts also note that state governments may also suspend or terminate licenses should criminal charges be laid.

CLSA also said there could also be delays in the privatization of the West Australian TAB should the probe create issues for Tabcorp’s bidding of the asset.

“In our view, it may be difficult for the WA Government to issue Tabcorp a licence even though there is the possibility that Tabcorp could fail the 'suitable person' test in Victoria is very remote in our assessment. It is remote but no less present and this matter could drag out for perhaps two years. We thus believe that the WA government may consider delaying the tender of this licence."

Credit Suisse says the investigation could take months and potentially years.

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