Inside Asian Gaming

February 2011 | INSIDE ASIAN GAMING 21 affecting STDM/SJM, Inside Asian Gaming was told by industry sources that half of SJM reported to the CEO Ambrose So and the other half to Dr Ho’s fourth consort, Angela Leong. It’s anybody’s guess as to what the arrangements are at present. There were also significant mutterings in the local market at the time of the SJM IPO that much of the 25% equity on offer had been bought up by Dr Ho or proxies for him or other Ho family members. The sources added that these proxy holdings were in each case below the threshold 5% of issued equity that under Hong Kong Stock Exchange rules would require the stockholders to be publicly identified. That could mean the minority shareholders are in even more of a minority than they imagined, with little prospect of forming a bloc powerful enough to at least embarrass family members feuding over control of the parent STDM to take their views into account. China’s perspective Nor has very much been said about what China’s leadership would like to see happen to STDM/SJM. All the runners and riders for the STDM/SJM leadership roles so far identified by the Macau and Hong Kong media—including Angela Leong, Dr Ho’s children Pansy, Daisy Ho and Lawrence Ho, and Timothy Fok, a son of Henry Fok, have at the very least membership of a regional People’s Consultative Committee in China listed on their CVs. But then that’s virtually obligatory for any Chinese who wants to be successful in running a gaming operation in Macau or pretty much any major enterprise anywhere in Greater China. Seen from China’s viewpoint, the succession question at STDM/ SJM is not a purely commercial issue. Who has majority control of STDM/SJM and whom the majority shareholder or shareholders appoint to run STDM and SJM matters to China. That’s not just because SJM is currently the largest single operator in the Macau market, generating about one third of gross gaming revenue. Just as state companies inside the People’s Republic act as instruments of state policy as well as acting as commercial enterprises, so STDM/ SJM, because of their history and roots, can be seen in some ways as commercial proxies for the Macau government and, by extension, proxies of Beijing. There’s a joke recounted by Paulo Jorge Reis, a former deputy director of information under the Portuguese administration, that sums up how some of the Portuguese felt about the power of STDM, the holder of the40-year gamingmonopoly issued toDr Hoandhis business associates in 1962: “Stanley Ho used to sit at the right hand side of the governor, and a senior official from China used to sit on the left. When the governor needed money, he turned to his right. Then the governor would turn to his left to ask permission to spend it.” Not a natural socialist And yet Stanley Ho, by upbringing and outlook, was hardly groomed for a life as a natural ally of communist China. He is a great nephew of Sir Robert Ho-tung, an archetypal Eurasian tai-pan who helped to build the Hong Kong-based colonial trading company Jardine-Matheson. Sir Robert also helped fund the revolutionary movement of Dr Sun Yat-sen that led to the creation of the impeccably bourgeois Republic of China following the collapse of theChinese imperial dynastic system in 1912. It was that bourgeois republic that the communists fought so hard to overthrow in the late 1940s after the Japanese withdrawal from China. Even after he got his feet firmly under the table as ‘Mr Macau’, Dr Ho occasionally either overreached himself in his relationship with the central government or miscalculated the mood. He got into frightful trouble with Beijing in the run up to the handover of Hong Kong and Macau to China, when he suggested the territories ought to become United Nations-administered zones for a transitional period. And yet it’s a sign of his talent for survival in business and politics and of his current stature that it’s hard to see any of the so far named candidates for the succession comfortably filling his 49-year old shoes. Business culture STDM/SJM without Stanley Ho, but still run by close and trusted associates of the leadership in Beijing is, though, a very much better prospect for China than an STDM/SJM run by an individual with looser ties to the central government. Such an individual might be more intent on taking the companies away from their family roots and down a more Western path as commercial entities majority-owned by public shareholders. By that reading, whoever acts as figurehead and/or steward of the largest single holding or largest faction of Angela Leong—consort number four takes on two and three Sir Robert Ho-tung—not from the Mao Zedong wing of Chinese politics SJM Succession Seen from China’s viewpoint, the succession question at STDM/SJM is not a purely commercial issue.