A report in the UK Guardian says regulators in several Australian jurisdictions will have a say in whether Lawrence Ho’s acquisition of Crown Resorts shares can go forward. Ho recently announced he would buy 19.9 percent of the Aussie gaming giant, and has expressed interest in buying even more of the company owned by his friend and former partner James Packer. If Ho buys more of the company, the foreign investment review board also may have to vet the deal, the publication reported.
Crown has gaming licenses in New South Wales, Victoria and Western Australia; each of the state-based gaming authorities has the right to review Ho’s fitness as a major Crown shareholder. NSW will “take the lead,” the report added, because the state’s authorities included a specific clause in Crown’s license for the new Barangaroo casino in Sydney, which is now under construction. The clause specifies that Crown “prevent any new business activities or transactions of a material nature between Stanley Huang Sun Ho or a Stanley Ho associate and Crown, any of Crown’s officers, directors or employees or any Crown subsidiary.” Lawrence Ho is the son of Stanley Ho, founder of SJM Holdings who for years had a monopoly on gaming in Macau. In the past his 21 companies in Asia have been linked to Chinese triads, or organized crime syndicates.
Forty-two-year old Lawrence, one of Ho’s 17 children by several wives and consorts, has distanced himself from his father, and recently dismissed SJM as “a bit of a joke.”
“My association with him is the fact that I am his son,” the younger Ho said. “But apart from that I run my businesses and my life pretty much separate from him.”
Packer recently told the Australian Financial Review that Lawrence Ho built Melco “on his own with no link or help from Stanley”; the two men reportedly bonded over their similar histories. Both are the sons of powerful businessmen. James Packer’s late father, Kerry Packer, was a billionaire media tycoon.
When the Barangaroo licensed was issued, Ho and Packer were in business together in Macau in a business they called Melco Crown. Sources said “the Stanley Ho clause” was included “in an abundance of caution”; plainly the government could exercise its right of refusal if it finds any reason to disapprove of Melco as an entity or Lawrence Ho as an operator.
In a filing to the New York Stock Exchange, Melco said it “intends to pursue board representation on Crown’s board of directors commensurate with its ownership position. Additionally, subject to obtaining requisite regulatory approvals, Melco welcomes the opportunity to increase its ownership in Crown.”
The Australian investigations are likely to be painstaking and it could take a year or longer before a decision is made. NSW authorities took almost three years to investigate Malaysian company Genting when it made a bid to buy 25 percent of Star Entertainment.
Packer has been candid about a recent bout with depression, and a sale of part of Crown first made the headlines when Wynn Resorts reportedly was interested in buying in. Those talks ended, and Ho stepped in with an expression of interest. He paid some $1.8 billion for the almost 20 percent stake.
In his book, The Price of Fortune, author Damon Kitney said pressure from the multibillion-dollar gaming and hospitality business may have undermined Packer’s health, along with a financial split with his sister Gretel, a failed foray into Hollywood called Ratpac, the collapse of his romance with singer Mariah Carey, the dissolution of Melco Crown, and a scandal in which 19 of his employees were imprisoned in China for promoting gaming on the mainland.
“The horrors of 2016 had left Packer, for the third time in his life suffering a nervous breakdown,” Kitney writes. “Those who knew him well and saw the private pain of his two previous mental crises say this latest iteration was by far his worst. It led him in March 2018 to acknowledge to the world for the first time that he was battling mental health issues as he resigned from the Crown board for the second time in the space of two and a half years.”
Packer, who cooperated on the book, told Kitney, “I lost my reputation and serious people treat me differently both because of the charges that were levied against our staff in China and because we sold out of Macau,” he told Kitney.
In a statement to the Australian Stock Exchange when the Ho deal was announced, Packer said, “Crown has been a massive part of my life for the last 20 years and that absolutely remains the case today—my continuing Crown shareholding represents my single largest investment.”
Meanwhile, Ho has said Crown’s resorts in Perth and Melbourne “are world-class entertainment destinations and I believe that Crown Sydney, much like Melco’s Morpheus property, will create an architectural icon for the city, the country and the world.”
