Details emerge on firing of Sands China executive

By Steve Green

Thursday, Dec. 30, 2010 | 2:05 a.m.

Casino-resort operator Las Vegas Sands Corp.’s top executive in China was told in August he had been fired for working on unauthorized deals and multiple violations of company policy, a recent court filing shows.

On July 23, Sands’ subsidiary Sands China Ltd. announced that Steve Jacobs had been removed as CEO and from the Sands China Board of Directors.

Jacobs, in an October lawsuit in state court in Nevada against Las Vegas Sands, confirmed he had been told he was fired for cause.

Jacobs, in his suit in Clark County District Court in Las Vegas, charged he was improperly terminated after disputes with Las Vegas Sands Chairman and CEO Sheldon Adelson and Jacobs’ resistance to demands that he engage in improper and illegal activity.

Las Vegas Sands has now responded to the lawsuit, on Dec. 22 filing a motion for dismissal that included as an exhibit a termination letter to Jacobs.

In the Aug. 5 letter from Venetian Macau Ltd., which Las Vegas Sands says was Jacobs’ actual employer, Jacobs was told his employment contract was being terminated with cause because “you repeatedly acted in a manner which exceeded your authority and failed to keep the board of Venetian Macau Ltd. or Sands China Ltd. informed on important business decisions and other actions that you took on behalf of the company and its subsidiaries, including those which exceeded your authority.”

Examples cited in the letter were that Jacobs:

• Disagreed in public with Adelson’s position on the growth prospects for Sands China.

• Exercised Las Vegas Sands stock options and sold Las Vegas Sands stock without first informing superiors.

• Negotiated “arrangements” for Macau development sites 5 and 6 without approval; and commissioned a brand study for those sites involving changing their names without informing the boards of Sands China and Venetian Macau.

• Negotiated a transaction with “Harrah’s” for certain development sites (site 3 and or sites 7 and 8). Harrah’s Entertainment Inc. of Las Vegas, now known as Caesars Entertainment Corp., lacks a Macau presence except a golf course on the Cotai Strip, where Las Vegas Sands has resorts and is developing others. It’s unknown what type of deal Harrah’s had worked with Jacobs on.

• Failed to obtain proper authorization prior to signing a Playboy agreement, apparently a reference to the new Playboy club in Macau.

• Traveled to Toronto three times to meet with Four Seasons officials without obtaining prior authorization to negotiate a deal, and finalized Four Seasons contracts without obtaining prior approval. In Macau, Las Vegas Sands has the Four Seasons Hotel Macao and Four Seasons-branded serviced-apartments.

• Negotiated with entertainment giant Cirque du Soleil without obtaining prior approval and without advising the boards of Sands China and Venetian Macau until midway through the negotiations.

• Made or attempted to make unapproved hires.

• Failed to discuss and agree on the Sands China board meeting agendas with Adelson, despite being required to do so.

Jacobs and his attorneys have not yet responded to these assertions.

Attorneys for Las Vegas Sands, in their motion for dismissal, said that while Jacobs had sued Las Vegas Sands and Sands China, he had failed to name an “indispensable” party as a defendant — his actual employer Venetian Macau Ltd.

For that reason, the lawsuit should be dropped, Las Vegas Sands said.

Las Vegas Sands attorneys said in the filing that Jacobs’ employment agreement with Venetian Macau Ltd. also requires that disputes over the agreement be resolved in Macau.

“Plaintiff’s suit against Las Vegas Sands rather than Venetian Macau is a strategic and calculated effort to mislead this court in a desperate attempt to litigate in the United States against a U.S. entity,” Sands said in its filing.

“There is the potential that if Venetian Macau is not joined in this proceeding, it would be the target of future, duplicative litigation,” said the filing by attorneys with the Las Vegas office of the law firm Holland & Hart LLP.