As I write this, Macau casino mogul Stanley Ho's troubles do not seem to be getting any closer to being solved. And by all indications, this saga is on its way to becoming a huge legal family drama with twists and turns worthy of even the most unbelievable TV soap opera.
News reports on this story are at times conflicting and inconsistent, reflecting perhaps the complexity and "Byzantine" nature of the matter. At the centre of the maelstrom is Mr Stanley Ho, an 89 year old businessman who owns a gambling empire that is several layers deep (Lanceford Co owns 31.6% of Sociedade de Turismoe Diversoes de Macao SA (STDM) which owns 56% of Sociedade Jorges de Macao SA (SJM) of which Mr Ho owns an 18% controlling stake, which in turn owns 22 of Macau's 33 casinos). He has 4 wives, Clementine de Mello who died in 2004, Mdm Lucina Laam (who gave birth to 5 children Pansy, Daisy, Maisy, Josie and Lawrence who are at the centre of the battle), Mdm Ina Chan and Mdm Angela Leong. But by all accounts, only 2 of the 4 women are legally married to him. The fracas over letters from the different wives purporting to indicate conflicting wishes of Mr Ho stems from the possibility that none of the latter 2 "wives" would be entitled to any inheritance should Mr Ho pass away without a will, making indisputable evidence of his inter vivos (living) wishes all the more crucial.
At this point one might ask, why all this fuss about one man? After all he is only 31st on the Forbes list of richest men in the world. Well, if you consider that Mr Ho's personal holdings (SJM) controls 30% of the Macau gambling empire, which is turn generates about USD30billion a year, roughly 3 times the revenue of the entire Las Vegas gambling strip, then it becomes news. If Mr Ho's 18% stake in SJM - some reports say in Lanceford - alone is worth $1.7billion (presumably in USD) - then 1% of SJM/Lanceford is in theory worth almost USD100million. That is no small change in anyone's books.
In all drama, its important to understand "motivation". Here, the gradual ascendance of the Leong faction was beginning to cause some consternation amongst the other families. In order to counter this rise, it is rumoured that Pansy Ho and Mdm Chan (2nd and 3rd families respectively) are now aligned with each other in the power struggle.
The drama unfolded on Monday 24th January 2010, through a statement released by law firm Ms Oldham Li and Nie, Mr Ho claimed that a series of share transfer transactions involving his stake in the casino empire was carried out without his approval. Apparently, through this series of transactions, the Chan family is reported to have obtained 28.6% of Mr Ho's stake in STDM, while the Laam siblings have split the remaining 49.5%. On Jan 26th, Mr Ho appeared on Hong Kong's TVB again and said that he did not want to sue his family members and urging a stop to family infighting. Hours later, however, despite this apparently conciliatory effort, a lawsuit was filed by Ms Oldham on Mr Ho's behalf against the 5 Laam siblings as well as Mdm Chan alleging improper or illegal" seizure of share control in his gambling empire.
As if this wasn't bizarre enough, just one day after the writ of summons was issued, on 27th Jan, a Notice of Discontinuance was reported to have been filed by Mr Ho - this time acting alone and without legal representation.
That very same evening, on 27th Jan, a secret family meeting took place. Mr Ho met with members of his 4 separate families, Pansy Ho (daughter of Mdm Laam), Angela Ho Chiu Yin (daughter of Mdm De Mello) and Mdm Angela Leong herself. Mr Ho's third wife, Mdm Chan, was conspicuously absent. After the meeting, Gordon Oldham (Mr Ho's lawyer) issued a statement which said that an agreement had been reached where in principle, Mr Ho will now distribute the Lanceford holdings equally amongst the four families, thus technically ending the family feud. This is not as done and dusted as it sounds - the next twist came when Pansy Ho issued a statement early on Monday 31st January confirming that such a secret meeting did take place, but denying that any agreement had been reached. Mr Oldham is now left looking like he doesn't really know who he is acting for, and Mr Ho himself does not appear to be in full control of the situation, his family or even his faculties.
So those are some of the convoluted facts as reported in various media - what of the evidence? Equally contradictory, as it turns out. Central to the documentary proof of Mr Ho's wishes on how to distribute his inheritance are 2 letters, one dated 5 January 2011 in which he claimed to want an equal split of his empire amongst the four factions. However, a second letter dated 7 January 2011 (produced by Mdm Laam's daughter Daisy Ho) purported to claim that Mr Ho wished all along to pass the reins of control in the empire to his second and third wives only.
Mr Ho himself, throughout this entire saga, appears unable to clarify his intentions without continually contradicting himself, or others producing evidence to contradict him. This is the crux of the whole issue - without a clear, unambiguous and enforceable statement of his wishes, the case is liable to drag on for years leading to huge legal bills, a huge waste of time and a possible weakening of the whole empire.
LESSONS IN LOVE
An analyst of the gambling industry from Royal Bank of Scotland is reported to have said that, "Ever since I've been covering this company, the concern has been about Stanley's succession plan. Those worries seemed to be going away, but now they look like they could come back with a bang".
One main lesson we should take away from this saga is how important it is to plan early for one's succession. A lawyer I once spoke to told me that by the time clients come to him, the damage has already been done. It is therefore far more important to plan ahead and ensure that these issues do not become legal proceedings: prevention is always better than cure. Even Mr Ho himself has said that "family matters should not go to court..." but yet, with all his brilliance and business acumen, he has failed to make any provisions to protect his assets and inheritance from coming to this unhappy state of affairs. In my years of working as a lawyer as well as in private banks serving high net worth individuals, I have seen clients obsessed with how to make money and accumulate wealth, and many are extremely good at it. But there are precious few (if any) who know or have been properly advised on how to protect and distribute their hard-earned wealth in the most advantageous way possible. That is why my company's motto is "iure legati tueri"* (which means "Protect your Rightful Heritage"* in Latin). Were more people - whether ultra rich gambling kings or mere working adults like you and me - to receive more timely and effective advice on how to deal with one's legacy, we would not be hearing so many needless horror stories. Perhaps a lot of the resistance to such matters as inheritance and estate planning can be traced to an Asian aversion to thinking about death; but as Stanley Ho's case has amply shown, failing to make a plan is to have a plan by default, and this "default plan" is one that is very likely to end in much grief, dispute and acrimony amongst his loved ones. The most devastating, and perhaps least appreciated, effect of all this family bickering is that the share price of SJM has already fallen 8.8% (to end at HKD13.80 by the end of Wednesday 26 January 2011) and any further price tumbling means direct erosion of the value of the estate. Trading was suspended in SJM shares on Tuesday 25th Jan and further suspensions can be ordered again at any time. It is not inconceivable that the price of an SJM share could eventually be worth only a fraction of its original value by the time things get sorted out, a process that can take many years, leaving everyone worse off including the party who "wins" this war. Surely this is not the heritage which Mr Ho has envisioned he would leave behind when he passes on.
* "Iure legati tueri" and "Protect Your Rightful Legacy" copyright Stephen Yan 2011, all rights reserved
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