As octogenarian jewellery tycoon Cheng Yu-Tung lay comatose, regulators from Queensland’s Office of Liquor Gaming and Racing dithered in the wings.
They were conducting due diligence on the billionaire’s company Chow Tai Fook Enterprises [CTFE], which was part of a consortium, also including the Star Entertainment Group, that wanted to develop an entertainment precinct at Queen’s Wharf in Brisbane, with a casino at its core.
Cheng Yu-Tung, the former Chow Tai Fook Jewellery Co. Ltd boss.Credit: South China Morning Post via Getty Images
What they would discover about CTFE’s connections to organised crime figures was destined to remain secret; CTFE has taken out a court order preventing the Herald from publishing the details, which were contained in a subsequent leaked report. But the circumstances surrounding their probe can be pieced together from material on the public record.
It was 2015, and nobody could have guessed that by the time the Brisbane casino opened – last week – the hushed money laundering then underpinning the nation’s casinos would be exposed and foiled by new regulations and that Star Entertainment would be on the verge of bankruptcy, dragged down in part by the cost of this very project.
Back then, the eyes of Queensland MPs were swimming with $1 billion in gambling taxes that stood to be generated by the casino over the next decade. CTFE had billions of dollars in tangible assets and the ability to guarantee the project in exchange for its 25 per cent share.
The prospect of its involvement was an offer they could scarcely refuse.
A probity report into Queen’s Wharf Casino will remain secret.Credit: Michael Howard
But Cheng Yu-Tung, also known as CYT, carried a whiff from his decades-long friendship with Stanley Ho, a casino mogul widely suspected of being linked to Chinese triads and banned from operating casinos in several jurisdictions.
The regulators wanted to know how deeply their ties extended before giving Chow Tai Fook Enterprises the green light to operate a casino. And while CYT lay in his coma, nobody else seemed to have the answers.
The late gambling tycoon Stanley Ho.Credit: Bloomberg
CTFE was, on the surface, a perfectly respectable family business, and an enormous success story in Hong Kong where its name was ubiquitous.
Founded as a single jewellery store in 1929, it had expanded to become the largest jewellery retailer in the world, and diversified into property development, hotels, ports and casinos.
The conglomerate’s executive ranks were peppered with relatives, including CYT’s son, Henry, who controlled the family empire, grandson Adrian, who ran its flagship property group New World Development, and granddaughter Sonia, head of Rosewood Hotel Group.
A few years earlier, the family had set up a charitable foundation that was donating HK$100million to good causes annually.
It could also lay claim to having bested Donald Trump in a business deal – and perhaps played a bit role in his ascension to the White House – when it bailed him out of a development on the Upper West Side of Manhattan in 1994.
Trump later sued the Chengs’ development company, unsuccessfully, but the deal saved him from a personal bankruptcy that would have cluttered his presidential run.
Henry Cheng is one of Hong Kong’s richest people.Credit: Bloomberg
However, the family behind the company was opaque.
CYT had started in the business as an apprentice goldsmith at its newly opened store in Macau, having fled from China during World War II. Chow Tai Fook was named for good luck, class and prosperity, and in 1943 CYT exemplified each of those values by marrying the founder’s daughter, securing his future for generations to come.
It was in Macau that he met Ho, a refugee from Hong Kong who survived by running smuggling trips up the Pearl River Delta before, in 1961, securing the monopoly licence for the province’s casinos. CYT bought into the consortium that held the licence in 1982.
But though Ho – a flamboyant businessman with four “wives” and 17 children – was never charged with organised crime activities, the shroud of suspicion around him tarnished CYT by association.
The New Jersey Division of Gaming Enforcement named CYT in a report into the suitability of Ho to operate a casino in that province in 2010, saying he had “extensive business dealings” with Ho and had been involved in the establishment of VIP rooms in three different casinos.
The VIP rooms were operated by third parties, which became an avenue for triads to enter the casinos and engage in racketeering, loan sharking and money laundering, the report said.
The Canadian Royal Mounted Police had conducted its own probe into the connection between CYT and triads in the late 1990s.
However, according to a ministerial brief obtained under freedom of information, CYT’s vegetative state also gave the regulator a plausible reason to exclude him from consideration into whether CTFE was a suitable casino operator.
“Investigators were firmly of the view that CYT did not control or influence CTFE, having divested his shareholding and handed over control of CTFE to his son, Henry Cheng, several years prior,” the minister was told.
“CYT retained a directorship of CTFE as a matter of respect.”
The minister duly approved CTFE as a suitable casino operator.
Non-answerability at CTFE re-emerged for the Queensland government in 2022, when allegations were raised that the company was associated with notorious junket operator Alvin Chau.
The Queensland government ordered a second investigation, conceding in May this year that CTFE “lacked candour and fulsomeness” in its dealings with the regulator, which it put down to cultural differences.
But when the Herald was leaked the full report, CTFE took legal action to kill the story.
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