Macau casino magnate Stanley Ho on Tuesday accused his family of stealing shares in his business empire and leaving him with almost nothing after a share restructuring he said was done without his consent.
Reigniting concerns about succession plans for his $10 billion casino company, SJM Holdings <0880.HK>, Ho's lawyer said the billionaire had not authorized the transfer of shares in a holding company to his family members that was announced on Monday.
This is robbery, Gordon Oldham, a senior partner at the Oldham, Li & Nie law firm quoted the tycoon as saying.
However holding firm Lanceford Co, whose shareholders include Ho's third wife and five children from his second wife, said the 89-year old billionaire had approved in writing the transfer of the bulk of his assets to the family.
It is regrettable that Oldham, Li & Nie rushed to publicize these matters without checking the underlying facts in connection with the relevant transactions and we reserve our rights against that firm, it said.
In a statement issued on Tuesday evening, SJM said that the Lanceford arrangement is a matter for the various members of Dr. Ho's families to resolve and does not directly affect the company, while saying there would not be a material change in management or strategic direction of the company.
The firm applied for its shares to resume trading on Wednesday.
Ho, the chairman of Macau's biggest casino operator, started out in his business career with just $10 and over nearly half a century built a lucrative gambling empire in the former Portuguese colony where he held a monopoly until 2002.
In recent years, the territory has granted new casino concessions to operators including Wynn Resorts Ltd <1128.HK> and Las Vegas Sands Corp <1928.HK>. They have helped transformed Macau from a tranquil enclave into a pulsating hub of neon lights and playboy bunnies, with revenue streams that dwarf rival Las Vegas thanks to unabated demand from affluent mainlanders.
WILL WEIGH ON SJM SHARES
The share restructuring, detailed in a filing to the Hong Kong stock exchange by SJM on Monday, said Ho would no longer have any attributable interest in Sociedade de Turismoe Diversoes de Macau, S.A. (STDM), which controls SJM's parent, STDM - Investments Ltd.
Lanceford controls STDM.
SJM's shares were suspended on Tuesday after being partially suspended on Monday, prior to the announcement. SJM closed down 4 percent on Monday after earlier falling as much as 9 percent after the share statement.
Analysts said the dispute would inevitably weigh on the stock, which hit a record high last week.
Whenever there are family disputes, it's generally negative news and the stock will behave accordingly, said Andy Lam, a strategist at Harris Fraser in Hong Kong.
There've been similar stories over shareholding between family members in the past, and it's always been negative on the stock.
Since the once spry octogenarian's health deteriorated following brain surgery in 2009, intense speculation has swirled over the risks of a potentially bitter succession battle amongst the four women publicly recognized as his wives and at least 17 known children.
Oldham said Ho warned that he would initiate legal proceedings against his family in the next 48 hours unless the matter was resolved.
Dr. Ho believes that his interest in Lanceford, which contains the bulk of his assets, has had share transfers taking place by his second and third family, said Oldham.
The effect of which is to dilute him (his assets) to almost nothing, well to nothing, and this is again without his knowledge, without his consent and certainly against his wishes.
Oldham would not talk about Ho's state of health except to say he was very distressed by his family's actions.
REVENUES DWARF VEGAS
Ho's family members including daughter Pansy Ho and Daisy Ho, both directors at transport-to-property conglomerate Shun Tak Holdings Ltd <0242.HK>, were unavailable to comment directly. California-educated Pansy is U.S.-listed MGM's venture partner in Macau, where MGM plans to conduct an initial public offering later this year.
Under the restructuring announced on Monday, the 26.8 percent stake in STDM held by Lanceford Co Ltd was transferred to family-run firms Action Winner Holdings Ltd and Ranillo Investments Ltd, which together now own Lanceford's 31.7 stake in STDM.
New shareholders include Ho's third wife, Chan Un-chan, and five children from Ho's second wife, Lucina Laam King-ying. The share proportion has been divided with Chan getting a 50.5 percent stake and the five siblings Pansy Ho, Daisy Ho, Maisy Ho, Josie Ho and Lawrence Ho, splitting the remaining 49.5 percent, Lanceford said in a statement on Monday.
In a letter from daughter Daisy Ho, dated January 7, she writes to Stanley Ho saying: The share allocation at Lanceford was done in accordance with your instructions. I am glad you once again acknowledged and re-affirmed your instructions and I trust there is no longer any confusion about this.
Reuters was also sent a copy of this letter by email which has a signoff from both Stanley and Daisy Ho.
(Additional reporting by Kelvin Soh, Alison Leung and James Pomfret; Editing by Lincoln Feast and Jon Loades-Carter)