Family Feud
Macau gambling magnate Stanley Ho has been in declining health since falling in 2009 and sustaining a brain injury. He has been absent from the leadership of most of his companies, including the casino company, SJM. In January, he transferred some of his ownership in that company to his fourth wife, Angela Leong, naming her managing director. But a more substantial distribution revealed around Christmas met with a series of accusations from both sides.
It started with an announcement that Ho had given away most of his holdings in the parent company of casino operator SJM Holdings Ltd. to five of his children—Lawrence, Pansy, Daisy, Maisy and Josie; his second wife, Lucina Laam Kinng-ying, and his third wife, Ina Chan Un-Chan.
A statement from the company said Stanley Ho “no longer has an attributable interest” in STDM, the parent company. The company stressed there would be no changes in its management or in strategic direction.
Analysts said the distribution was part of an orderly transfer of ownership as Ho’s health worsens.
“Stanley Ho is getting old,” Victor Yip, Hong Kong-based analyst at UOB-Kay Hian Ltd., told Bloomberg. “The action is part of his plan to distribute his wealth to family members. SJM’s daily operations are already handled by Ho’s competent assistants.”
But the day after the announcement, Stanley Ho issued a statement charging that he had been “hijacked” out of his assets. By the following day, everything had been resolved, as Ho was joined by his third wife, Ina Chan, and their daughter Florinda Ho for a television statement. Ho read haltingly from cue cards saying that all of the main issues had been resolved.
“This recent disturbance has made me very unhappy and my family very unhappy because in the past 10 years I’ve loved my family very much and have not taken measures: ‘I sue you, you sue me,’” he said.
After offering that olive branch, however, the wives and children were not forthcoming in resolving the issue and Ho re-instituted the suit, according to his lawyer, Gordon Oldham.
Pansy Ho, a partner with MGM Resorts in MGM Grand Macau, said no one from the second and third families has discussed the plight with the media, and suggested that they were open to negotiations.
“We welcome all constructive dialogue between the families to seek to resolve this situation amicably and in the best interests of the families,” she said in a release.
The developments are things that usually happen after the death of a patriarch, and don’t bode well for SJM when the eventual happens. The stock fell 5 percent on the news and questions remain unanswered about who might succeed Ho. And the family feud is likely to grow more bitter as it has been divided into four different factions.
Two factions are joined with other casino companies. Lawrence Ho is co-chairman and CEO of Melco Crown and Pansy owns 50 percent of MGM Grand Macau and any other developments by the company in the SAR.
In addition to a negative impact on SJM, the uncertainty in the Ho family may affect the planned Asian IPO by MGM Resorts. Already delayed from late 2010, the company announced it would proceed with an $800 million offering—up from $500 million—with expectations it will be completed by the second quarter of ’11. Analysts questioned whether the timing is advantageous.
