Crown inquiry to unravel Ho’s family ties

One of the highlights of the Crown Casino inquiry will be how Lawrence Ho describes his relationship with his father.

Melco CEO Lawrence Ho. Picture: Bloomberg

One of the highlights of the inquiry into whether Crown Casino breached the conditions of its restricted gaming licence to operate in NSW will be how James Packer’s friend, Macau casino operator Lawrence Ho, describes his relationship with his father.

While James Packer has said he will co-operate with the inquiry, it is understood that Ho will also agree to fly to Sydney to appear after being named as a witness.

The opening day of the hearing this week has already revealed a complex web of shareholdings of the various players including Lawrence Ho, Stanley Ho, James Packer and the Crown group.

It will also reveal the different paths Ho and Packer have taken when it comes to family.

While Packer has often talked about his late father Kerry, the Hong Kong-based Lawrence Ho has rarely publicly discussed his more complex ties with his 98-year-old father Stanley.

Packer has regularly spoken of affection for Kerry, but the 42-year-old Lawrence Ho, who grew up in Canada, has spent a lifetime distancing himself from allegations and questions around his Hong Kong-based father, who has had four wives and 19 children.

Gaming regulators around the world, including in Australia, New Jersey, Nevada, Macau and Cyp­rus and potentially regulators in Japan, where Lawrence is hoping to hit the big time, will be watching the inquiry to see how he explains his relationship with his father.

Stanley Ho has been banned from operating casinos in Australia and the US as a result of a string of allegations that he has had links with Triads and organised crime during decades of operating casinos in the former Portuguese colony of Macau — allegations which he denies.

As bizarre as it may sound to the layman, the inquiry which began this week, headed by former NSW Supreme Court judge Patricia Bergin SC, will look at whether Lawrence Ho and his father are “associates” under the terms of NSW gaming laws.

Lawrence Ho’s company Melco bought a 9.9 per cent stake in Crown from Packer’s private company last May, with plans to increase it to at least 19.9 per cent in a deal that would be worth $1.75bn.

If Lawrence Ho is deemed to be a close associate of his father, it could mean that Crown is technically in breach of the conditions of the restricted gaming licence to operate its VIP casino at Sydney’s Barangaroo, which is set to open next year.

For James Packer, still a major shareholder in Crown, the financial implications of the fallout from the inquiry, if it finds against Crown, could be substantial.

As the inquiry heard on Tuesday, Lawrence Ho has been deemed to be a suitable partner and associate for James Packer and Crown in previous investigations and by gaming authorities in NSW, Victoria and Western Australia.

The crunch has come with an addition to Crown’s restricted gaming licence in NSW, referred to as Schedule 2, which specifically declares that Crown cannot have any association with Stanley Ho and sets out a specific list of companies and people seen to be associated with Stanley.

Once Lawrence bought into Crown last May, the share sale agreement triggered the current investigation that started this week, which has to look into Lawrence Ho’s ties with companies and people on this list.

These include Stanley’s major holding companies, Sociedada de Turismo Diversoes de Macau (STDM) and the Sociedada de Jogos de Macau (SJM), companies in the Shun Tak group (which owns the Hong Kong to Macau ferries and has extensive property in Macau), Stanley’s Grand Lisboa casinos, Lawrence’s his three older sisters Pansy, Daisy and Maisy Ho (by Stanley’s second wife), Stanley’s third “wife” Ina Chan and his current and fourth “wife”, Angela Leong. The key companies to be reviewed by the inquiry will be Hong Kong-registered Lanceford, which is believed to be a non-operational company used for the distribution of Stanley’s inheritance to some of his children, and Great Respect Limited, a company incorporated in the British Virgin Islands.

Lawrence Ho is a beneficiary of money from his father, as are all of Stanley’s children.

But the real question will be whether his very elderly father has any actual influence or financial influence at all over Lawrence.

The inquiry this week outlined the complex web of companies around Lawrence, who heads up Melco International and Melco Resorts and Entertainment, and those around father Stanley.

The corporate ties stem from the intertwined family relationships of the sprawling Ho family.

Stanley Ho has dominated the Macau casino business in Macau since the early sixties. The business attracted some decidedly seedy characters before the Macau government decided to open up the industry to new players in 2002, partly to clean up its image.

Lawrence is the youngest child of Stanley and his second wife, Lucina Laam, who also had daughters Pansy, Daisy, Maisy and Josie.

(The 57-year-old Pansy Ho plays a key role in some of Stanley’s businesses, including its Shun Tak property interests and ferry business between Hong Kong and Macau, and is considered his main heir apparent in the business sense.)

As father Stanley moved on to a much younger third wife, Ina Chan, Lawrence and his family moved to Canada where he went to school and graduated from the University of Toronto in 1999.

Lawrence returned to Hong Kong after graduation as began working as an investment banker with Jardine Fleming and Citibank.

In 2001 he bought into the Hong Kong-based Melco International Development, a company that owned the famous Jumbo floating restaurant in Hong Kong’s Aberdeen.

With the casino business in Macau opening up, he bought a half-stake in a casino resort in Macau from his father and expanded into the poker machine business in the city through Mocha Clubs, which opened in 2003.

The opening up of the business in Macau saw Pansy get into the business in her own name, teaming up with America’s MGM to open up a casino in the city.

In 2004 Lawrence made a big jump in his business status, teaming up with James Packer’s Crown which had been given a licence to operate in its own name in Macau thanks to Kerry Packer’s longstanding links with Las Vegas casino operator Steve Wynn, who got a licence to operate in Macau and had a soft spot for James.

Then in his late twenties, Lawrence knew of the allegations against his father and was keen to tie up with Packer and a reputable company like Crown to form a joint venture that would set him up in a business with a very different corporate image to that of his father — and one which was independent of his father.

From the beginning, Lawrence Ho knew he would be watched closely and was determine to be squeaky clean when it came to any issues of corporate governance.

Living in Hong Kong, just across the water from Macau, Lawrence Ho effectively took over the day-to-day operation of Melco Crown Entertainment, the joint venture that opened the City of Dreams, which was built by then ASX-listed Leighton Holdings, and other properties.

In December 2006 the joint venture business was listed on the Nasdaq over-the-counter market in the US, raising more than $US1.14bn.

There were reports that the strait-laced Lawrence Ho, who is still with his first wife, Sharen, had some raised eyebrows over the lifestyle that Packer pursued in the US.

But with some ups and downs, the two operated happily in business together, building up their profitable joint venture in Macau, which in 2007 overtook Las Vegas as the biggest gambling centre in the world in terms of turnover.

Together Packer and Lawrence Ho expanded into the casino business in Macau with new properties, moved into The Philippines and were looking at other areas of expansion, including Japan.

But it was a change in Packer’s own circumstances that prompted him to sell out of the joint venture in 2017.

If James Bond was in the city, would this be the hotel he would go to? That’s the goal.

Packer wanted to reduce Crown’s debt load, and following the arrest and imprisonment of 19 Crown employees in China in 2016, he decided to pull back from the company’s Asian expansion plans and focus on the Australian market.

Lawrence Ho’s fortunes, including the value of Melco, have continued to rise strongly, while Packer has suffered personal and health issues and has cut back his interests to focus on Crown’s business in Australia.

The inquiry, which could take several months, will put a cloud over his ambitious plans to expand into NSW with his Bangaroo development.

Meanwhile, Ho is now eyeing the big prize of Japanese market where casino gambling has been officially approved but licences have yet to be awarded.

But when his friend James Packer decided he wanted to sell down his stake in Crown last year, Ho was prepared to buy out some of it, in a deal struck so quickly that apparently Crown itself did not know about it until after it was done.

Their current regulatory problem stems from the fact that the gaming regulator in New Jersey, where MGM operates a casino, were investigating Pansy Ho and her links to her father.

It was this highly critical report on Stanley Ho reportedly led to the inclusion of Schedule 2 in Crown’s restricted gaming licence in NSW.

The organisational chart of companies associated with Lawrence Ho’s Melco shows a key company in the ownership structure of Melco International is Great Respect, which owns 20.37 per cent of Melco and is controlled by a family trust that includes Stanley Ho and Lawrence Ho as a beneficiaries.

The chart of companies associated with Stanley Ho shows a company owned by Lawrence and his four older sisters, Ranillo Investments, has a 49.5 per cent interest in a company called Lanceford, which owns 31.6 per cent of Stanley’s STDM which in turn owns 54 per cent of SJM.

Crown Residences under construction at One Barangaroo. Picture: Toby Zerna

The chart also shows that Stanley’s third wife Ina, who is listed in Schedule 2 as a banned associate for Crown, is the other major shareholder in Lanceford, through her company Action Winner Holdings, which has 50.5 per cent of Lanceford.

Lawrence Ho, who apparently had no idea of the companies listed on Schedule 2 when he bought into Crown in May, resigned as a director of Lanceford in June last year.

In interviews given last year after buying into Crown, Lawrence Ho hailed Crown as “the most prestigious gaming and hotels group” in Australia.

He argued that his stake in the highly regulated Australian casino market was a “great step” in his hope for expansion into Japan.

In an interview with the Macau Daily Times, Ho said “extensive regulatory work” into his probity had been done by Australian gaming regulators in reviews between 2014 and 2017.

He clearly didn’t count on the emergence of the current inquiry.

But he is believed to not only be willing to appear before the inquiry but sees it as a way to further prove his probity in the gaming world.

Lawrence has made a point of arguing that all his casino resorts are of the highest quality, using the latest in architecture and design.

In an interview with the South China Morning Post in 2018, showing off his new state-of-the-art $US1.1bn hotel called Morpheus, designed by the late architect Zaha Hadid, Ho says he wanted his hotels and casinos to be the kind of place James Bond would want to go to if he went to a city.

“We think, would James Bond go to this hotel?”

“If James Bond was in the city, would this be the hotel he would go to?

“That’s the goal.”

This begs the question: Will James Bond ever go to Barangaroo?

And if so will Lawrence Ho be a part of the action?