After fathering at least 16 surviving children by four "wives", Stanley Ho's estate was always going to be complicated. But few imagined that such a bitter war for control of his vast gambling empire would break out while the frail tycoon was still alive, says The South China Morning Post. The twists and turns of this dynastic soap opera have gripped the residents of Hong Kong and Macau. But it's a nightmare scenario for investors in the "King of Gambling's" listed casino business, SJM Holdings (see below).
Until last week, it was thought that Ho, 89, had split his empire equally between all his children. Then came news of a coup. Five children from his second marriage (Pansy, Daisy, Maisie, Lawrence and Josie) had allied with his third wife to grab 99.98% of Lanceford the holding company that controls most of Ho's $3.1bn fortune effectively disinheriting the rest.
There followed an "increasingly bizarre ping-pong" of conflicting statements from Ho, says The Wall Street Journal. First, he condemned the move. Then he made a faltering TV appearance apparently endorsing it. The following day, his lawyer filed a suit formally accusing his children of "improperly and/or illegally" seizing his assets. Soon after that, the case was dropped.
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The prize at stake is huge, says Bloomberg Businessweek. Ho's giant conglomerate, Sociedade de Turismo e Diversoes de Macau, "covers virtually every facet of Macau's economy". That's not counting the casinos. His four-decade monopoly on gambling in the Portuguese colony ended in 2002, but he still sees off rivals to take more than 50 cents of every dollar bet there. For that, says Ho's eldest daughter Angela, he can thank her late mother, Clementina Leitao. Her connections in Portugal and Macau "were the biggest single factor for my father winning the gambling monopoly in 1961".
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A scion of one of Hong Kong's most powerful families, Ho's family fortunes were so badly hit by the Great Depression that two older brothers committed suicide. During World War II, Ho moved to neutral Macau and made a killing smuggling luxury goods across the Chinese border. He later cleaned up in the 1950s Hong Kong property boom. His career has never been "free of controversy", says The Daily Telegraph: some have alleged links with Chinese triads. But, in business, he showed the habitual caution of a casino-owner who "never bets himself". It was his private life that was out of control.
Old age has seen Ho swap the delights of the boudoir for ballroom-dancing and truffles (he once paid a record $330,000 for one specimen). But his failure to control his progeny has come back to haunt him, says The Times. He ends his days bewildered and "wrenched around by competing forces within his vast clan".
The tragedy of Asia's King Lear
The future of Stanley Ho's holdings has been in question ever since he was hospitalised for brain surgery in 2009, says The Wall Street Journal. But the events of the past week have cast considerable doubt over his "mental competence". Markets are none the wiser as to "his real intentions, who really represents him and whether he is of sound mind to make major decisions concerning the disposition of his wealth". Since the fracas started, some $1.6bn has been wiped off the market value of his SJM casino group.
Ho's predicament has parallels with Shakespeare's King Lear, says the FT. Like Lear, the kingdom he built and thought was his to distribute may have already been grabbed by some of his ungrateful children. Shakespeare's tragedy plays out in five painful acts. "With teams of lawyers, 21st-century financial systems and far more progeny, the unfolding tale of Mr Ho's disappearing kingdom looks set to go on far longer than that."
Protracted family feuds are by no means an exclusively Asian phenomenon, says Stephan Wagstyl on the FT's BeyondBrics blog. But succession tussles do seem particularly prevalent in the East. In Hong Kong alone, there have been arguments between billionaire Li Ka-Shing and his son Richard Li, and among the members of the Kwok property clan. The machinations of Nina "Little Sweetie" Wang for control of her late husband Teddy's empire, meanwhile, sparked a brutal internecine war.
Expect more of the same as the many Asian tycoons, who built their wealth after World War II, start handing over control of their companies, says Bloomberg Businessweek. Investors who have poured a net $150bn into emerging-market equities much of it into family dominated firms should take a good look at the Stanley Ho saga.
