Stanley Ho's War of Succession

[Muchenyi]

Stanley Ho Accuses Family Members of Seizing Casino Stake



Macau billionaire Stanley Ho accused family members of seizing his stake in Asia’s biggest casino empire, plunging ownership of the gambling business he built over five decades into dispute.

Ho, 89, may take action to keep control of Sociedade de Turismo e Diversões de Macau, said his lawyer Gordon Oldham, the senior partner of Oldham, Li & Nie. The transfer of most of Ho’s casino holdings went against his wishes to divide his assets equally among his family, Oldham said.

“What really upsets him is that he’s not even dead yet, but in the twilight of his life his second and third families appear to be squabbling and pinching it for themselves,” Oldham said by phone today. “There’s no doubt that he has all his faculties.”

SJM Holdings Ltd., operator of 20 casinos in the world’s biggest gambling hub, said yesterday that Ho agreed to transfer a 31.7 percent stake in parent STDM to two companies owned by family members. The billionaire, who built his gambling empire after fleeing to Macau from Hong Kong ahead of the Japanese army in World War II, had started shifting assets after being released from a seven-month hospital stay last year.

Asia’s biggest casino operator halted its shares in Hong Kong trading today pending the release of a “price-sensitive statement.” SJM, which has the biggest gambling share in the former Portuguese colony, dropped the most in a month in Hong Kong trading yesterday on concern the ownership transfer may affect decision making.

‘Slight Concern’

“There’s a slight concern over the legal action,” Andrew Sullivan, director of institutional sales at OSK Securities Hong Kong Ltd., said by phone today. “There will be that split between family members. Yet whatever the outcome of the re- distribution, I very much doubt you’ll see the company severely damaged. Day-to-day running of the company will continue.”

The stake in STDM represented about 80 percent of the value of Ho’s assets, said Oldham. Ho may take legal action if the dispute isn't settled within 48 hours, Oldham said.

Ho and partners in 1962 secured a gaming monopoly in Macau, a 10-square mile territory one hour by ferry from Hong Kong, from the colonial government. The city’s government ended his monopoly in 2004, allowing the entry of foreign operators such as billionaire Sheldon Adelson’s Las Vegas Sands Corp.

Ho sired 17 children with four women, according to his daughter Pansy, who is the Macau partner of MGM Resorts International.

Demanding an Explanation

Chan Un-chan, whom Ho refers to as his third wife, and children Pansy, Daisy, Maisy, Josie and Lawrence took control of Lanceford Co., which holds the biggest stake in STDM, at 31.7 percent, according to statements yesterday from SJM and Brunswick Group LLP, the public relations company for Lanceford. The five children are from the woman he refers to as his second wife, Lucina Laam King-ying.

Action Winner Holdings Ltd., owned by Chan, will hold a 50.55 percent stake in Lanceford, and Ranillo Investment Ltd., controlled by the five children, will have 49.45 percent, according to Brunswick yesterday.

Stanley Ho sent a letter to Daisy demanding an explanation for the change, and hasn’t seen a response, Oldham said. Lanceford also holds other assets and represents the bulk of Stanley Ho’s wealth, Oldham said.

SJM Stake Transfer

Ho was ranked Hong Kong’s 13th richest man with a net worth of $3.1 billion by Forbes magazine earlier this month.

SJM is 56 percent owned by STDM, according to data compiled by Bloomberg.

Joseph Lo, a director at Brunswick, which represents Lanceford, couldn’t immediately respond to the report and said he was trying to get in touch with the family. Calls made to press secretaries for Pansy and Stanley weren’t answered.

Lawrence Ho has no comment on the newspaper report according to Maggie Ma, a spokeswoman for Melco International Development Ltd. Lawrence is the chairman of Melco International, which rose 3.7 percent to HK$5.67 at the noon trading break in Hong Kong.

Ho last month transferred his 7.7 percent stake in SJM to Angela Leong, mother of his five youngest children, after he was released from a seven-month stay in a hospital last March.

SJM has a market share of 32.6 percent in Macau, the only place in China where casinos are legal, according to a Jan. 17 research note from CLSA Ltd. analysts Aaron Fischer and Huei Suen Ng. Sands China Ltd. has 16.5 percent followed by Wynn Macau Ltd. with 15 percent and Galaxy Entertainment Group Ltd. with 12.6 percent, the CLSA analysts estimated.

Gambling revenue for the city’s six casino operators rose 58 percent to 188.3 billion patacas ($23.5 billion) last year, according to government data. Last year’s increase of $8.6 billion is 50 percent more than the total gambling revenue for the Las Vegas Strip for all of 2010, according to data compiled by Bloomberg.

Shun Tak Holdings Ltd., a property developer that also operates ferries between Hong Kong and Macau, on Dec. 2 said Ho cut his direct ownership in the company in favor of two holding companies in which his children have stakes. Shun Tak rose 0.4 percent to HK$5.10 in Hong Kong trading.

in Bloomberg

Stanley Ho, who was honoured with the Grã-Cruz da Ordem do Infante Dom Henrique of Portugal Government, still controls the largest single share of the Macau gaming market (31.9% of the gross in the first quarter of 2010) even eight years after the formal end of his monopoly and six years after the opening of the first foreign owned casino, Sands Macao.

It's easy to read too much into SJM's and Dr Ho's continuing ascendancy in the Macau gaming market. It could be as much to do with his competitors' mistakes (such as their initial determination to try to cut out the junkets) as his own good judgement. And SJM has suffered self-inflicted wounds along the way, such as the intra family litigation linked to SJM's flotation on the Hong Kong Stock Exchange.

Dr Ho is a mortal just like the rest of us, as his recent unfortunately extended stay in hospital illustrated. Like a good general or a good chess player, however, Dr Ho and his management team do seem to have the ability to see several moves ahead in the game. This means that when SJM acts in the Macau market, it may not be doing so in a strictly linear 'stimulus and response,' 'cause and effect' way. It may be positioning itself for an opportunity as yet unseen by the market as a whole or in order to counter a threat several steps down the track. In order to get that overview, you either need a high vantage point, or good intelligence. SJM has both.

[Blackraven]

Slightly off-topic but isn't Stanley Ho the mastermind of Grand Lisboa (the tallest hotel and casino in Macau)???

If yes, then I still have high respect for him in that case (because it is my favorite or at least one of my fave hotels in Macau)

I'd take Grand Lisboa over Venetian any time

[mrfusion]

Originally Posted by Blackraven

Slightly off-topic but isn't Stanley Ho the mastermind of Grand Lisboa (the tallest hotel and casino in Macau)???

If yes, then I still have high respect for him in that case (because it is my favorite or at least one of my fave hotels in Macau)

I'd take Grand Lisboa over Venetian any time

Indeed he is, despite he indirectly create lots of gambling related issues in Macau and HK, he also makes plenty of contributions to Macau.

Also, do you know he is actually Bruce Lee's cousin?

[Muchenyi]

Hey mrfusion, did you know Uncle Stanley is a Portuguese citizen? It should piss you off. Big time!

[mrfusion]

Originally Posted by Muchenyi

Hey mrfusion, did you know Uncle Stanley is a Portuguese citizen? It should piss you off. Big time!

Yes, I do know, why should it pissed me off. I got nothing aganist Portuguese citizen, I got nothing against you. We just have different opinion when it comes to Portuguese's importance in Macau.

[hkskyline]

Family of ailing casino tycoon Stanley Ho battles for control of Macau fortune
1 February 2011

HONG KONG (AP) - As three "wives" and 16 children of tycoon Stanley Ho grasp for control of his casino fortune, the veneer of professionalism has peeled from his business empire, one of many family-run companies facing succession time bombs in this southern Chinese entrepot.

The ailing, 89-year-old Ho is emblematic of a generation of Asian magnates who made their millions through cozy relationships with the region's political power brokers. They now face a world where governments are less tolerant of monopolies and where globalization has brought competition and innovation that sweeps aside weaker businesses.

Many of the outlandish trappings of the Asian-style crony capitalism found from South Korea to Hong Kong to Indonesia have faded. Still, the family business empires the old order sustained have sprouted numerous branches, creating a tangle of dynastic rivalries that belie the modern patina.

In Ho's case, there is a lot to fight over: his personal wealth of $3.1 billion, according to Forbes magazine, and the lion's share of the Macau gambling industry -- the world's biggest. Ho once had a monopoly on Macau's casinos but now his business interests, which are listed on the stock exchange of neighboring Hong Kong, vie against giants like Las Vegas Sands Corp. and MGM Resorts.

Though his illnesses have left him a facsimile of his former flamboyant self, Ho's business rise has paralleled the fortunes of Macau.

The enclave grew from a seedy, colonial outpost administered by corrupt Portuguese administrators into a modern, Chinese-run gambling powerhouse that has overtaken Las Vegas. Macau reverted to Chinese sovereignty in 1999, and the government ended Ho's monopoly in 2002 to boost the economy. Last year, gambling revenues surged to a record $23.5 billion.

Key to Ho's gambling success was his now-deceased first wife, Clementina Leitao, whom he wed in 1948. Her father was a prominent lawyer in Macau, and her connections to Portugal and to Macau high society helped Ho and his partners win the casino monopoly in 1962. Around the same time, Ho married Lucina Laam under a Qing dynasty code which allowed men to take multiple wives. Hong Kong outlawed the practice in 1971.

Ho has fathered children with two other women, Ina Chan and Angela Leong, whom he refers to as his "wives," though he is not legally married to either. Ho reportedly met Chan, who was a nurse, when she was hired to take care of an ailing Leitao, who died in 2004.

The rival branches of the billionaire's family are now publicly feuding over control of his casinos and a collection of businesses that run everything from the ferries connecting Hong Kong and Macau to department stores, hotels, Macau's airport and its horse- and dog-racing tracks. Principally at stake is his $1.6 billion interest in Hong Kong-listed casino operator Sociedade de Jogos de Macau, known as SJM.

"Thanks partly to our relatively recent industrial emergence, most of the local companies are still in family control, not widely held, so we have a greater share of succession issues," said David Webb, a shareholder activist who runs the Hong Kong corporate governance watchdog Webb-site.com.

The power struggle erupted in public on Jan. 24 with a company statement that Ho had given his SJM stake to the families of his second and third wives. A flurry of claims and counterclaims by family factions ensued.

At one point, Ho was wheeled out in a chair by his third wife, Chan, to read a halting statement on Hong Kong television declaring the dispute had been settled. Ho's lawyer, who says the casino magnate was pressured into the statement and wants to divide his estate equally, filed suit to reclaim the assets, likely leading to a protracted legal tussle. Public relations firms for Ho's second and third families and for Ho's lawyer said he was not available to comment.

As the high-stakes drama plays out, it has highlighted the dilemma faced by a generation of aging Hong Kong tycoons who, reluctant to relinquish power, are beset by competing claims to their fortunes.

The family of Nan Fung Group founder Chen Din-hwa has been squabbling over his company, which has interests in property, textiles and shipping. Chen, 87, is Hong Kong's 11th richest person, according to Forbes, who puts his wealth at $3.8 billion.

The sons of Kam Shui-fai, the late founder of Hong Kong restaurant chain Yung Kee, renowned for roast goose, are battling for control of his estate. In 2008, the chief executive of Sun Hung Kai Properties, a major developer, was ousted by his two younger brothers after he accused them of plotting to remove him by portraying him as mentally ill.

Such disputes are "to a certain extent quite common in Chinese family businesses, particularly if the patriarch has a number of wives and concubines," said Victor Zheng, an assistant professor at Hong Kong University who has written a book on the Chinese inheritance system.

Tradition dictates that Ho give the family of his first wife a greater share of the estate, said Zheng, who added that it appeared as if the families of the second and third wives were plotting to claim a bigger share.

Elsewhere in Asia, the handover of family wealth between generations is now largely choreographed in advance.

Under the longtime dictatorship of Indonesia's Suharto, whose lucrative family-run businesses dominated the economy, sibling rivalry over multimillion dollar deals burst into the public arena. But today, disputes in most family-run conglomerates -- the Salim Group, for instance, headed by Liem Sioe Liong -- tend to be handled discretely. One generation quietly passes on control to the next.

Likewise in South Korea, where family controlled conglomerates, known as chaebol, have long been the drivers of the country's economy. Control of the two most prominent chaebol -- respectively anchored by Samsung Electronics Co. and Hyundai Motor Co. -- is widely expected in coming years to pass smoothly to a third generation.

Ho, however, has long courted publicity.

Allegations of organized crime have dogged him for years, most recently in a 2010 report by the New Jersey gaming commission that accused him of letting Chinese criminal gangs, or triads, prosper inside his casinos during the 1990s.

Ho denied any ties and has never been charged.

Born in 1921 into Hong Kong's wealthy Ho Tung family, he was 13 when his father lost his fortune in a stock market crash and abandoned the family.

During the Second World War, Ho, fluent in English and Chinese, was working as a telephone operator for British forces when the colony fell to Japan. He ditched his uniform and boarded a boat for neutral Macau, where legend has it he landed with only $10 Hong Kong dollars in his pocket, and started a trading business that supplied Japanese forces.

During the war, he also led smuggling and trading trips up the Pearl River Delta and its tributaries in neighboring Guangdong province in China, on one occasion surviving a pirate attack, according to the book "Asian Godfathers" by Joe Studwell, who cites a rare and unpublished interview given in 1995 to historian Philip Snow.

He has been known to spend lavishly. In 2007, he paid $8.9 million for a bronze horse head stolen by French troops 150 years ago from China's imperial palace so he could donate it to a Chinese museum.

In August 2009, he underwent brain surgery to remove a blood clot after falling and hitting his head, according to news reports. He didn't leave the hospital for seven months.

In his twilight, Ho appears an increasingly tragic figure, but some believe the succession battle may be the casino king's one last power play.

"I think Dr. Ho himself may try to manipulate these different branches of the family, and the problem may become even messier," said Hong Kong University's Zheng.

--------

Associated Press writers Kelly Olsen in Seoul, South Korea and Robin McDowell in Jakarta, Indonesia contributed to this story.

[Muchenyi]

Originally Posted by hkskyline

The enclave grew from a seedy, colonial outpost administered by corrupt Portuguese administrators into a modern, Chinese-run gambling powerhouse that has overtaken Las Vegas.

Let me guess...this article was made in Hong Kong.

[hkskyline]

Originally Posted by Muchenyi

Let me guess...this article was made in Hong Kong.

AP is American, by the way.

[DanielFigFoz]

Thats not a very nice thing to say about the Portuguese, even if it wouldn't surprise me if its true . Although corruption is not a major major problem in Portugal, of course it exists though