Billionaire Stanley Ho demanded family members return the bulk of his Macau casino fortune by tomorrow or face legal action as an ownership dispute threatens to split Asia’s biggest gambling empire.
The transfer of most of Ho’s assets to six family members, disclosed in a Jan. 24 statement, was done without his consent, and the 89-year-old patriarch gave his lawyers “very clear” instructions to recover them, Gordon Oldham, senior partner at law firm Oldham, Li & Nie, said yesterday. The disagreement took another turn today when Oldham rejected family statements that everything was settled and he was being dismissed. He said he was still acting on Ho’s instructions.
Ho’s SJM Holdings Ltd. slid as much as 8.8 percent in Hong Kong trading as the family squabbled over control of a gaming business that the casino magnate, who has sired 17 children by four women, spent five decades building. SJM, with a market value of $9.7 billion as of yesterday, runs most of the casinos in the Chinese city of Macau, where gambling revenue is four times that of the Las Vegas Strip.
“The market’s puzzling about the whole thing, and it’s starting to feel like we’re watching a TV drama,” said Victor Yip, a Hong Kong-based analyst at UOB-Kay Hian Ltd. “No one knows the final outcome. Many investors will be profit-taking in the short term.”
Equal Division
Ho may take legal action to keep his 31.7 percent stake in Sociedade de Turismo e Diversoes de Macau, S.A., which represents the majority of the value of his assets, Oldham said. The transfer of STDM assets to the woman he refers to as his third wife and five of his children, announced Jan. 24, went against his wishes to divide them equally among his family, Oldham said.
The disputed stake was worth at least $1.67 billion according to Bloomberg calculations using SJM’s closing stock price yesterday. The shares traded at HK$13.08, down by 5.2 percent, at the noon trading break in Hong Kong.
STDM owns 56 percent of SJM, according to data compiled by Bloomberg. The market value of SJM, which has the biggest gambling share in the former Portuguese colony, has surged more than fourfold since its initial public offering in 2008.
‘Squabbling and Pinching’
“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 yesterday.
In his office, Oldham showed stills from a video of himself chatting with Ho, who wore a powder blue zip-up sweater, had his gray hair brushed back and sat next to current companion Angela Leong. The video was made yesterday at Ho’s home and showed the magnate “has all his faculties,” Oldham said.
Ho was hospitalized in August 2009 after an accident and underwent at least two surgeries during a seven-month stay.
Brunswick Group LLP, the public-relations company representing some family members, said yesterday that Ho gave written authorization for the transfer of his stake in STDM.
The billionaire, who built his business empire after fleeing to Macau from Hong Kong ahead of the Japanese army in World War II, started shifting assets after leaving the hospital.
Handwritten Letter
Ho “has been the central foundation” of the family’s business empire as he resisted the breakup of his monopoly for four decades, said Andrew Sullivan, director of institutional sales at OSK Securities Hong Kong Ltd.
“He was the one holding it together,” Sullivan said by phone today. “In the past everyone has had to defer to him. The key thing is knowing what the new reality is -- who is running the key bits of the business.”
Brunswick later produced a printed document on Ho’s letterhead and a handwritten letter, both of which appear to bear his signature, which said he is firing Oldham and keeping the originally announced allocation of shares in the family vehicle Lanceford Co. as “100 percent” his intention.
The document said Ho’s giving Chan Un-chan, whom he calls his third wife, “full authority” in this matter, and that any documents with his signature proposing changes to the share allocations are “definitely not genuine.”
Clear Instructions
Oldham said today he’s proceeding with Ho’s instructions and hasn’t heard from the billionaire since the statements were issued. “If this is not resolved, we’ll be in the high court tomorrow, if not today,” he said.
Chan Un-chan and children Pansy, Daisy, Maisy, Josie and Lawrence took control of Lanceford, which holds the biggest stake in STDM, according to statements from SJM and Brunswick.
The five children are by the woman Stanley Ho refers to as his second wife, Lucina Laam King-ying.
“My instructions were very clear,” Oldham said. “He said: Get me Lanceford back.”
Brunswick yesterday released a copy of a letter dated Jan. 7 that it said was from Daisy to her father in which she refers to a “misunderstanding” that “has been cleared up.”
“The share allocation at Lanceford was done in accordance with your instructions,” the letter said.
It had a note at the bottom with Stanley Ho’s signature acknowledging he handed over the STDM shares.
Lisboa, Venetian
The letter was a response to Stanley Ho’s demand for an explanation, Brunswick said in an e-mailed statement. Cyndi Tang, a Shun Tak employee, referred queries for Pansy Ho to Brunswick.
Lawrence Ho, chairman of Melco International Development Ltd., had no comment, said spokeswoman Maggie Ma.
The tussle poses “a big problem” for SJM and its 20 casinos, said Kenny Tang, executive director at Redford Assets Management. The Lisboa casino competes with Sands China Ltd.’s Venetian Macao in a city whose gambling revenue is more than double that of Nevada’s.
“If the fights for control don’t stop, the company can’t make any major decisions for long-term development,” he said.
Ho, born into a prosperous Eurasian family in 1921, traded kerosene and airplanes after fleeing to Macau, and at one point fought off pirates, said Joe Studwell, author of “Asian Godfathers: Money and Power in Hong Kong and Southeast Asia.”
He lured bettors into smoke-filled halls with fading paint and worn carpets after Macau’s colonial government in 1962 granted him and his partners a gambling monopoly over the 10- square-mile territory, which is one hour by ferry from Hong Kong. Gangs fought to run VIP rooms for high-stakes gamblers as prostitutes and loan sharks patrolled casino doors.
STDM generated 75 percent of Macau’s tax revenue each year before China took control in 1999 and used its army to calm the violence.
The Macau government ended Stanley Ho’s monopoly in 2004, allowing the entry of operators such as billionaire Sheldon Adelson’s Las Vegas Sands Corp. Ho was ranked Hong Kong’s 13th- richest man, with a net worth of $3.1 billion, by Forbes magazine this month.
To contact the reporters on this story: Debra Mao in Hong Kong at dmao5@bloomberg.net; William Mellor at wmellor@bloomberg.net
To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net
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