Billionaire Stanley Ho said his legal dispute with family members over ownership of their Macau gambling business has been resolved, and he has withdrawn his lawsuit, driving up SJM Holdings Ltd.’s shares.
A settlement agreement was executed on March 8 among all branches of Ho’s family on the basis of “mutual understanding and mutual accommodation,” according to an e-mailed statement from the casino tycoon’s office.
Ho’s privately held Sociedade de Turismo e Diversoes de Macau SA invests in construction, hotels and Macau’s airline, and also owns a controlling stake in SJM, Asia’s biggest casino company. Ho earlier said daughters Pansy Ho and Daisy Ho seized his 31.7 percent SJM stake, worth HK$12.4 billion ($1.6 billion) based on today’s share price.
“We have agreed that we shall work together and continue to develop the gambling business in Macau founded by Dr. Ho and operated by the Ho family to enable it to flourish,” Stanley Ho and his family wrote in the statement. Ho, who has honorary doctorate degrees, said he withdrew a writ filed Feb. 16 against the daughters.
SJM, which operates most of the casinos in Macau, advanced 5.8 percent to HK$12.80 at the 4 p.m. close on the Hong Kong stock exchange, the highest level since Feb. 7. The city’s benchmark Hang Seng Index fell 1.6 percent. Before today, the stock had lost 7.3 percent since Jan. 24, when SJM said Ho’s holdings had been transferred to family members.
“This should remove the overhang for SJM shares, which have been very weak since the dispute began,” said Aaron Fischer, a casino analyst at CLSA Ltd. in Hong Kong. “It is in the best interests of all Ho family members that this matter is finalized.”
The Ho family members agreed to discharge their duties to the family companies, closely held STDM and publicly traded SJM, according to yesterday’s statement. The dispute was resolved “amicably,” the family said.
“We all have balanced participation in SJM and STDM,” Angela Leong, the executive director of the Hong Kong-listed casino operator and mother of Ho’s five youngest children, said in an interview with Cable TV, without disclosing details. “We have understanding and courtliness to each other, and we are satisfied with this result.”
The structure of SJM’s board of directors won’t change, she said.
“Three weeks of negotiation is always preferable to years of litigation,” Ho’s lawyer, Gordon Oldham, of Oldham, Li & Nie, said today in a text message. “We were tasked with bringing a resolution to this family dispute and I’m glad we were able to be part of achieving such.”
Ho’s secretary, Janet Wong, declined to comment on the contents of the settlement and Crystal Chan, an external spokeswoman for the family’s Lanceford Co. at Brunswick Group, said she couldn’t immediately provide further information.
The Feb. 16 lawsuit sought an order declaring that the transfer of 99.98 percent of the shares in Lanceford, which owns 31.7 percent of closely held STDM, was made without Stanley Ho’s approval.
Pansy Ho and Daisy Ho “improperly and/or illegally” transferred the Lanceford stake to a company they control along with their siblings and another controlled by Chan Un-chan, whom Ho refers to as his third wife, according to the writ.
SJM, which has the biggest share of Macau’s casino market, “welcomes the reported settlement of the dispute and is of the view that there will be no material change in management or strategic direction,” it said in a statement today.
Ho built his fortune over five decades after Macau’s colonial government granted him and his partners a gambling monopoly in 1962. The monopoly wasn’t renewed after 2001 and Macau eventually allowed rivals, including Sheldon Adelson’s Las Vegas Sands Corp. and Wynn Resorts Ltd., founded by billionaire Steve Wynn.
Ho and his family still take in more than 50 cents of every dollar bet in the Chinese enclave. The 89-year-old was released from the hospital in March 2010 after a seven-month stay, and he was readmitted briefly Jan. 31.
He received honorary doctorate degrees from educational institutions including the University of Hong Kong, the University of Macau, the Hong Kong Polytechnic University and the Open University of Hong Kong.
The case was Dr. Stanley Ho v. Ho Chiu King, Pansy et al, HCA268/2011 in the High Court of Hong Kong.