Accused of "accounting fraud", Genting Malaysia is being pursued for $2.6 billion in compensation.

Genting Malaysia reported to Bursa Malaysia today that its wholly-owned U.S. subsidiary, Genting Americas (GAI), was sued by RAV Bahamas Limited (RAV) in the Southern District Federal Court of Florida on October 7 local time, with the lawsuit notice served to GAI on October 11.

In a statement, the lawsuit involves the operational matters of Resorts World Bimini in the Bahamas, with RAV seeking damages of over 0.6 billion US dollars.

In response, Genting Malaysia stated in the announcement: "GAI believes the lawsuit is baseless and entirely without merit, and will actively defend against it."

Resorts World Bimini, owned and operated by BB Entertainment Limited, with Genting Malaysia indirectly holding 78% of the company's shares, while RAV holds the remaining 22%.

According to Asian gambling magazine "iAG" (IAG) citing local media reports, RAV alleges in the lawsuit that Genting Malaysia, as the major shareholder, turned the resort into a "financial ruin" by transferring almost 1 billion US dollars (approximately 4.291 billion Malaysian Ringgit) in debt to Resorts World Bimini.

According to the complaint, RAV describes this behavior as 'a large-scale collusion fraud', causing RAV's contribution to the assets of Bimini Landmarks World to 'basically become worthless'.

RAV also accuses that the other party 'deprived' the joint venture of profits, and 'deliberately obstructed' further investigation, refusing to provide complete access to the accounts.

The report also indicates that according to BB Entertainment's past financial reports, losses were recorded in 2020 ($105.6 million), 2021 ($114.2 million), and 2022 ($1.513 billion).

By the end of 2022, BB Entertainment's accumulated liabilities reached $0.8852 billion (approximately 3.8 billion Ringgit), with most coming from loans from BB Investment Holdings, which are interest-bearing, with Genting holding the majority stakes of the latter.

BB Entertainment was established in 2012 as a 50:50 joint venture initially, with RAV contributing 20 acres of land to further develop the existing Bimini Bay, followed by Genting acquiring majority shares in 2015.

RAV also stated that Genting attempted to sell the property before resolving the financial misallocation issue in BB Entertainment.

"Due to the resort valuation of BB Entertainment, significantly lower than the approximately $0.9 billion debt on its financial statements, GAI effectively deprived RAV of the full value of the 20-acre land contribution, with RAV not receiving any return from it."

Upon the news release, Genting Malaysia's stock price plunged during midday trading, dropping as much as 9 sen or 3.8% to 2.26 ringgit, marking a new low since November 9, 2020.

As of the market close, Genting Malaysia slightly narrowed its decline, closing at 2.27 ringgit, down by 8 sen or 3.4%, with a market cap of 13.47936 billion ringgit, ranking 36th in market capitalization.

Genting Malaysia seems to be having an unlucky year, with its stock price down over 15.6% from the closing price of 2.69 ringgit compared to last year.