Chinese Estates Chairman Charged With Bribery in Macau
Joseph Lau, the billionaire chairman of Chinese Estates Holdings Ltd. (127), will stand trial for bribery and money laundering in Macau in connection with a land purchase in the world’s biggest gambling hub.
Macau’s Court of Criminal Instruction accepted charges brought by the public prosecutor against Lau, rejecting a request to dismiss the case on lack of evidence, the developer said yesterday in a statement to the Hong Kong stock exchange. Chinese Estates didn’t immediately respond to a fax request for comment from Lau.
Lau, an avid art and wine collector, was named last month in the corruption trial of Ao Man-long, Macau’s former secretary of transportation and public works, in relation to land being developed by Chinese Estates in the only Chinese city where casinos are legal. Ties between Hong Kong tycoons and government officials have come under scrutiny since the arrest in March of the co-chairmen of developer Sun Hung Kai (16) Properties Ltd.
“Macau is a small place and the ties between business and the political establishment are very close,” said Joseph Cheng, a professor of political science at City University of Hong Kong. The government is sending “a warning to all those involved in corruption and bribery.”
Chinese Estates suspended trading in Hong Kong today pending a price-sensitive announcement. The stock has lost 21 percent this year, compared with a 1.9 percent gain by the benchmark Hang Seng Index.
Hong Kong Tycoons
Lau, who controls almost 75 percent of the HK$18.7 billion ($2.4 billion) Hong Kong-based developer, will be tried in the Court of First Instance “in due course,” Chinese Estates said in the statement. He denied allegations that emerged in Macau court proceedings that he or his company might have given bribes to Ao, according to an April 17 statement by Chinese Estates.
Lau paid HK$129.5 million for two pairs of imperial crane statues at a Christie’s International auction in Hong Kong in December 2010. In November 2006, he paid $17.4 million for “Mao,” one of Andy Warhol’s portraits of the late Chinese leader Mao Zedong, a record at the time.
His case is the latest involving Hong Kong tycoons and government officials. The city’s Independent Commission Against Corruption in March arrested Thomas and Raymond Kwok, co-chairmen of Sun Hung Kai, and Rafael Hui, formerly the city’s No. 2 official. Walter Kwok, the former chairman of Hong Kong’s biggest developer, was arrested this month as the commission widened its probe.
Hong Kong’s Chief Executive Donald Tsang is also under investigation for taking rides on the yachts and planes of his business friends.
The Standard newspaper reported April 17 that Lau and Steven Lo, chairman of the South China Football Club, were named in Ao’s third trial. Ao, sentenced to 28 years in 2009, faced six corruption and three money-laundering charges in the latest proceedings, the newspaper said. Lo didn’t reply to a message left with the South China Football Fan Club.
Chinese Estates said in the April 17 statement that a unit owns the leasehold interest in the land that newspapers reported was cited in the Ao case. The company is building on the land a luxury residential project called La Scala, which it has been selling. It said in March that one of La Scala’s 7,000 square-foot (650 square-meter) penthouse units had been sold at HK$83.8 million.
Macau Home Prices
Macau’s casino revenue grew to more than four times that of the Las Vegas Strip after the government allowed the entry of overseas operators in 2002, including Las Vegas Sands Corp. and Wynn Resort Ltd., ending billionaire Stanley Ho’s four-decade monopoly. Visitors from the mainland fueled a 42 percent jump in gambling revenue last year.
That has led to a building boom and a gain of as much as 15 percent in home prices in the former Portuguese colony this year, according to Midland Holdings Ltd.
“The government is now considering measures to cool it down,” said Ronald Cheung, chief executive officer of Midland in Macau, adding that projects like Chinese Estates’ La Scala will continue to attract buyers.
Lau’s public holdings in his flagship Chinese Estates and a dozen other companies are worth $5.5 billion, according to data compiled and calculated by Bloomberg using Hong Kong exchange filings and company reports.
He owns his stake in Chinese Estates shares directly and through two trusts, an almost 5 percent stake in Ping An Insurance Group Co. (2318) and 7.34 percent of Lifestyle International Holdings, a retailer in Hong Kong and China.
Lau canceled an order for Boeing Co.’s 787 Dreamliner, the Chicago-based aircraft manufacturer said in 2009. Lau had placed the order for the plane, valued at about $178 million at the list price, in May 2007.
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