Latin America's two largest casino operators, Enjoy and Dreams, want to merge to become an even bigger operator in Chile.The plan has not gone smoothly, and new allegations of fraud have surfaced among casino operators in the country, potentially derailing the deal.
Media outlet Diario Financiero revealed the potential collusion this weekend.It showed her internal documents from a third casino operator, Marina del Sol, revealing "facilitating behavior" regarding her bid.
According to the report, "senior executives" in the casino industry used undetectable WhatsApp groups to conduct business.There, they talked about the bidding process and negotiated deals related to who would run what.
uncover the truth
The starting point of the media exposure is the record of February 2 last year. Anonymous complaints against Dreams, Marina del Sol and Enjoy are highlighted.The complaint was forwarded to the National Economic Prosecutor's Office (FNE, an acronym in Spanish), which opened an investigation into alleged collusion.
He was subsequently accused of fraud and other illegal activities.As a result, investigations were conducted, including the seizure of personal computers and other equipment from key executives of the three companies.
FNE was paying attention to the tender conducted in October 2021.At that time, there were five companies competing for the license: Dreams, Enjoy, Marina del Sol, Grupo Empresas Cardoen, and Spain's Egasa.
A few months later, new evidence added.After Marina del Sol broke up with then-CEO Francisco Muñoz, he filed a wrongful termination lawsuit seeking $475 million in compensation.Some of his evidence includes classified internal documents prepared by casino antitrust attorney Javier Velozo.
The document confirms that there was intense communication, including WhatsApp, with Marina del Sol owner Nicholas Imchenetsky and others in the months leading up to the alleged bid.There were also face-to-face meetings to exchange information that may have manipulated the bidding process.
In response to his complaint, Marina del Sol's board of directors and Imchenetsky accused Muñoz of accessing and sharing confidential information.
What's Up On WhatsApp
The documents reveal that four months before the tender, the bosses of Enjoy, Dreams and Marina del Sol created a WhatsApp group called “Coord.” A group called Industry Themes” was created. In addition, two face-to-face meetings were held on July 4, 2021 and September 7, 23, in which Imshenetsky and others participated.
The investigation also uncovered audio recordings of executives. "Information about Enjoy's competitive strategy is sufficient to qualify as an agreement or concerted practice that substantially reduces the uncertainty of questionable bids," FNE's research concludes.
It added that Dreams and Marina del Sol have not fully disclosed their competitive strategy or reached any clear agreement on the deal.However, the public prosecutor's office determined that there was a mutual understanding that the two sides would respect each other's positions.
As a result, FNE concluded that Marina del Sol facilitated the collusion and that the discussions constituted an agreement on the tender.It further argues that unless both companies come up with a better explanation, seeking prosecution of those involved would be recommended.
Enjoy has already denied the allegations.The company released an official statement saying the conversation involving CEO Henry Comber was "about the union" and not about the bid.
Neither Dreams nor Marina del Sol has issued an official comment by press time.However, Imshenetsky has so far denied any wrongdoing.
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