$1.75 Billion Melco Crown Buyout Jeopardized Over Lawrence Ho Link to Blacklisted Company
Posted on: August 8, 2019, 03:22h.
Last updated on: August 8, 2019, 04:12h.
An investigation is underway in New South Wales, Australia, after evidence presented to the Federal Parliament Thursday showed that Melco Resorts CEO Lawrence Ho was, until very recently, directly involved with a company that is banned from doing business with Crown Resorts.
According to corporate documents filed in Hong Kong, when Ho agreed to purchase 20 percent of Crown last May for $1.75 billion, he was still listed as a director of blackballed Lanceford Company Ltd.
Ho’s father is Stanley Ho, who for decades ran the gambling monopoly in Macau, until the market opened up to foreign operators in 2002.
Under a 2014 licensing agreement that gave the go-ahead for Crown to build the Crown Sydney casino, which is scheduled to open in 2021, the operator was prohibited from doing business with Ho Snr or any of 59 companies and individuals associated with him, due to his alleged ties to organized crime.
On the blacklist are Lawrence Ho’s sisters, Pansy and Daisy, but not Lawrence, who was brought up and educated in Canada and has always claimed his own business empire was separate from his father’s.
Deal in Trouble?
But Lawrence Ho was listed, along with his sisters, as a director of Lanceford until June 28 of this year, less than a month after Melco had agreed to buy a big chunk of Crown Resorts from its founder and controlling stakeholder, James Packer.
The revelation could potentially derail the sale.
Within hours of the documents surfacing in the Federal Parliament, the NSW Independent Liquor & Gaming Authority announced that former Supreme Court Judge Patricia Bergin would be chairing an investigation into the Melco deal.
Bergin will also be examining recent allegations made in Australian media about the Crown’s VIP operations and its dealings with Macau-based junket operators.
The company has faced an unprecedented wave of negative publicity over allegations that it conspired with the junkets to bring criminals and money launderers into the country to gamble – allegations Crown describes as “deceitful, unbalanced and sensationalized.”
Stanley Ho and his family have always fiercely denied the allegations of triad affiliation that have dogged them for years.
But in 2010 the New Jersey Division of Gaming Enforcement (DGE) concluded that Ho was an associate of the Sun Yee On triads following an investigation into the suitability of MGM Resorts to operate the Borgata in Atlantic City.
Specifically, the regulators were examining the joint venture MGM had launched with Pansy Ho, the MGM Macau, which opened in 2007.
According to the DGE, the VIP rooms Stanley Ho had introduced to his casinos in the 1980s “provided organized crime the entry into the Macau gaming market that it had previously lacked.”
After the announcement of the Crown deal in late May, Lawrence Ho said he welcomed the necessary regulatory scrutiny that would follow and had nothing to hide. He emphasized that Australian regulators had looked into him before — when he entered into the now defunct Melco Crown joint venture — and had found no red flags.
“Both Crown and I have always stressed that my business dealings are independent of my father’s interests,” he told The Australian Financial Review. “We have already been in partnership with Crown for 12 years and have passed probity screens from regulators without an issue.”
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