In the news: China investigates Crown for alleged gambling crimes, Sinochem and ChemChina deny M&A rumors and the State Council releases rules for debt-for-equity swaps

Crown Resorts staff detained in China

In a blow for casinos which set up China offices to lure high rollers, PRC authorities have detained 18 employees of Australian gaming and resorts company Crown Resorts. Crown said it is working with the Australian department of foreign affairs to make contact with its staff, who were held following raids in the company's Shanghai, Beijing, Guangzhou and Chengdu offices. Melbourne-based Crown, which doesn't directly run casinos in China, holds a 27% stake in Melco Crown Entertainment Ltd. based in Macau. Marketing gambling to Chinese nationals is illegal in the country, though some operators boost their casino sales by promoting resort and tourism services. One industry employee said that he was surprised how big Crown's PRC-based team was, as most foreign operators use third-party vendors. An analyst said Crown may have misread the current enforcement climate, in which many operators have toned down advertising in the past two years, focusing more on live shows, restaurants and accommodation. Regulatory action is perceived as the highest risk factor in the industry, and the Crown probe follows a similar incident in October, when Chinese state television reported 13 South Korean casino managers and several local agents had been arrested on suspicion of luring people from China to gamble abroad by offering incentives such as free tours and hotel stays.