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The chairman and CEO of the cruise operator Genting Hong Kong, Lim Kok Thay, has resigned after one of the company’s vessels was diverted from Miami to end its journey in the Bahamas to avoid a US warrant.
The company has filed to end its business after the Covid-19 pandemic hit the cruise industry hard. The company said in a stock exchange filing that the chairman, who owns 76 per cent of Genting Hong Kong, stepped down on 21 January.
The deputy CEO and president of the company, Au Fook Yew, also stepped down.
The company appears to be moving towards liquidation as its operations are seemingly falling apart, Bloomberg reported.
Authorities in the US are ready to seize one of the company’s ships in Miami because of unpaid fuel bills. Online bookings for some of the company’s cruises have been paused and its shares have been suspended in Hong Kong.
Mr Lim launched the company in 1993. Part of the reason for the launch was to diversify the risk associated with the Genting group’s casino operation in Malaysia.
But the struggles of Genting Hong Kong may not a have large impact on other Genting companies in Malaysia and Singapore as they have no cross-shareholdings, apart from Mr Lim holding stakes in all of them.
In May, Genting Hong Kong reported a loss of $1.7bn, and its stock has dropped by more than 50 per cent since the beginning of 2020.
The company said in a filing to end its business that they expect to run out of funding at the end of the month.
The company’s shipbuilding subsidiary, MV Werften, filed for insolvency in a German court earlier this month.
As China is employing a Covid-zero strategy and Hong Kong is suffering an outbreak of the highly transmissible Omicron variant of the virus, the fall of Genting Hong Kong reveals an Asian tourism industry that has been reluctant to fully reopen.
Cruise companies in other parts of the world, such as Carnival and Royal Caribbean Cruises, are starting to recover as the Americas and Europe are starting to open back up.
Genting Hong Kong ship Crystal Symphony changed its route over the weekend to end its journey in the Bahamas rather than in Miami on Saturday as planned.
US Marshals and a custodian appointed by a court are ready to arrest the ship because of unpaid fuel bills to the tune of $1.2m. A federal judge in Miami issued an arrest warrant for the ship on Thursday, according to Stephen Simms, a lawyer working for Peninsula Petroleum Far East, Bloomberg reported.
The company has filed a lawsuit in an attempt to recover $4.6m in unpaid fuel bills for bunker fuel that they delivered to three Genting ships dating back to 2017.
Crystal Cruises said in a statement that around 300 passengers on the Crystal Symphony had their trip extended by a day and that they were taken to Port Everglades in Fort Lauderdale via ferry. From there, they were taken to airports in the area, the company said.
“This end to the cruise was not the conclusion to our guests’ vacation we originally planned for,” Crystal Cruises said, adding that they cannot comment on pending legal matters.
Actor and playwright Steven Fales, 51, was on the cruise. He told The New York Times that the “crew treated us like royalty through the tears of losing their jobs”.
“They’re all just heartbroken, and it was just devastating,” he added.
Another Genting Hong Kong company, Dream Cruises, has also stopped taking bookings on its site.