Thursday, 17 February 2011

Real Life Soap Opera

The fascinating drama surrounding Macanese casino tycoon Stanley Ho Hung-sun, his wealth, his four wives and 17 children continues with his lawyer filing a lawsuit yesterday to stop his daughters Pansy and Daisy from transferring shares that saw him lose control of his holding company, Lanceford.
In late January Ho revealed through the media he was angry at some members of his family who had redistributed his shares, leaving him with hardly anything. Then Pansy revealed two letters showing Ho contradicting himself -- and signing both letters -- and then his bizarre appearance on television reading a script written on a giant piece of cardboard saying he would not sue anyone.
The whole kerfuffle was great fodder for Hong Kong and Macau media, having a field day following the various members of the Ho family all over the posh areas of the city to see what would happen next.
Then nothing happened over Chinese New Year until now.
In a six-page High Court writ filed by Ho's lawyer, the 89-year-old is seeking an injunction against Pansy and Daisy to stop them "exercising undue influence" to take control of or deal in shares of more than the hundreds of companies in which their father has a stake.
"These two girls have gone beyond the limit," the lawyer quoted Ho as saying. He added the casino tycoon was "annoyed" and "disappointed" with his daughters.
Ho had dropped a lawsuit against them he had filed January 26 in exchange for returning his shares of Lanceford. But they still have not.
His stake in Lanceford was diluted to 0.02 percent from 100 percent after a massive issuance of shares on December 27, which relinquished control of the company to his third wife Ina Chan Un Chan and the five children of second wife Lucina Laam King-ying.

The stakes are huge as Ho's fortune is estimated to be worth $3.1 billion by Forbes Magazine last month.

Lanceford owns 31.655 percent of Sociedade de Turismo e Diversoes de Macau (STDM), which in turn owns a 55.7 percent stake in SJM, which indirectly operates 20 of Macau's 33 casinos. And as I have written before, the tables in Macau make many times more revenue than the entire Las Vegas strip.

There have been news analysis stories of how relatives fight bitterly to get a piece of the family business when the patriarch is nearing the end because no formal decisions have been made over the distribution of wealth or how the family business will continue to run.

This seems to happen more in Chinese families as the patriarch wishes to be seen as fully in control even to the end, because distributing their wealth before their death would be perceived as a sign of weakness.

But really these squabbles only give the markets the jitters when there is no proper succession plan in place so it's bad for business.

We'll all watch and see how this saga unfolds, as the father pits himself against his own flesh and blood.

Stay tuned.