One of Mayfair’s most famous high-end casinos has had its gaming licence revoked amid a growing controversy about the identity of its owner who remains anonymous due to “risk of violence or intimidation”.
With its crystal ceilings, luxurious restaurant and bars, The Park Lane Club, situated in the world renowned Hilton hotel, is one of the most prestigious casinos for high rollers in London.
Its millionaire clientele can play the roulette and blackjack tables with terrace views over Hyde Park, served by a total staff of 143 croupiers and other entertainers.
But it has been dogged with controversy in recent years, culminating in the Gambling Commission revoking its licence last month over concerns over the source of funds used to buy and operate the famous club.
The casino operator owning the licence is a company called Silverbond Enterprises, which made a profit of nearly £5 million at the club from £31.8 million turnover last year.
The ban raises serious questions over whether Silverbond’s auditors, Deloitte, and bankers NatWest had raised red flags earlier at the business which has a long track record of run-ins with the regulator over moneylaundering controls.
Outsiders in the industry had assumed the Commission’s ban referred to Silverbond’s 2014 takeover by a Latvian businessman who was accused four years later in a Ukrainian court of fraud and moneylaundering.
However, it has now emerged that the businessman, Vasilij Melniks, quietly sold Silverbond in 2018.
It appears that it was that 2018 takeover, and the new owner, which has aroused the Commission’s concerns.
Yet the new owner has used a little-known UK rule known as a “Section 790ZG” allowing people controlling a company to hide their identity at Companies House if they are “at serious risk of violence or intimidation” due to their business’s activities.
Silverbond’s shares are listed as being owned by a Geneva service company called SOGIP, which has an Italian banker, Ricardo Tattoni, on the board.
But the identity of the actual owner, or “controller” in legal terms, is impossible to tell.
At the time of the takeover, accounts suggest an £18 million loan to the company from Melniks was paid back to him and extended by the new owner.
Former casinos regulator Graham White said: “It seems incredible that the ownership of casinos in this country can be a secret. I find it quite staggering, frankly.
“And we need to know fuller details about why the licence was revoked. What due diligence did the Commission do on the past owner and what on the present owner?”
He said it was “ludicrous” someone could own a business anonymously in such a publically sensitive industry, where risks of problem gambling and moneylaundering are so high.
Problem gamblers and £2m cheques
The Park Lane Club is no stranger to the type of casino problems to which White was referring.
It was fined £1.8 million last year by the Commission for failings in its anti-money laundering and “social responsibility” duties. The Commission found it had failed to recognise potential problem gambling signs including a customer being violent, threatening staff and damaging property.
On the moneylaundering breach, it had failed to carry out the enhanced due diligence checks it should have done on 61 of its top customers. One who was not checked was a politically exposed person who should have been flagged immediately.
Prior to that, in 2016, the regulator found it had improperly allowing three customers to cash cheques of up to £2 million without adequate money laundering checks.
Questions asked in parliament
Separately, after reports of Melniks’ legal troubles in Ukraine hit the Press in 2018, MP Chi Onwurah asked in parliament whether the Commission had done proper due diligence on him before granting him the licence.
Tracey Crouch, then Culture undersecretary said the Commission assured her it made “enhanced and significant” investigations.
Melniks, who has denied the Ukrainian charges against him, appears to have exited the business in the same month as that parliamentary question.
Silverbond says its clientele is largely of “Middle Eastern and Asian origin”.
What the company says
Silverbond compliance director Debbie Dunn told the Evening Standard today: “Silverbond Enterprises are currently going through a protracted corporate change of control process with the Gambling Commission following new ownership in October 2018.
“We are unable to comment further to save prejudicing the ongoing legal process but can confirm that recent decision from the Gambling Commission is strongly contested and an appeal has been submitted against that decision.
“The premises can continue to trade during the appeal process.
“Following the sale of the company in 2018 Mr Melniks is no longer a shareholder nor a director of the company so we are unable to comment on his affairs.”
It declined to comment when asked the identity of the new owner.
Riccardo Tattoni is a 65-year-old Italian giving an address in Geneva. He has previously been on the boards of two dissolved UK companies called Felixstowe Developments and Can Pilot and has described himself variously as a banker and consultant.
What the regulator says
The regulator said it had revoked Silverbond’s licence because: “The Commission is not satisfied that it would have granted the operating licence to the Licensee had the new controller been a controller of the company when the application for the operating licence was made.
“In particular, given the Licensee’s failure to provide full and proper explanations with supporting evidence timeously the Commission is not satisfied as to the source of funds (SOF) used to acquire and support the Licensee at the time of the change of corporate control or to whom future profits of the Licensee would be paid.
“The Commission also identified concerns with the suitability of the new controller because of its unsatisfactory history in providing information requested as part of the Commission’s enquiries.”
Deloitte and NatWest did not comment. Melniks and the Gambling Commission did not respond to requests for comment.
In its last accounts, dated in December last year, Silverbond said the new ownership strengthened its financial position.