From the outset, the entire situation seemed untenable. One man, four wives, 17 children, prolonged health issues and a $4.8 billion fortune. If there were ever a scenario that seemed predestined to ignite in flames, this was it; and in the early months of 2011, that’s exactly what happened.
When Macau casino magnate Stanley Ho fell ill and had to undergo brain surgery, his family and business affairs crashed head-on in one of the greatest family feuds in the history of the “Las Vegas of China”.
From The Depression to the King of Macau Gambling
Stanley Ho’s journey from destitute child to the godfather of the Macao casino scene was both arduous and impressive. Stanley was born into one of Hong Kong’s more powerful and respected families. However, the good fortune would not last for long.
Stanley’s father Robert Ho-Tung went bankrupt during the great depression and eventually abandoned his family. Times were so bad that young Stanley later saw two of his brothers commit suicide.
His journey may have ended much earlier and much more tragically had it not been for the outbreak of the Second World War. As Japan began its brutal invasion of Asia, the Ho family fled to Macau, and Stanley eventually found work for a Japanese importer/exporter. His sharp mind and incredible skill allowed him to quickly obtain a partnership at the young age of 22.
Stanley was successful at building his trading business, but things really took off when his company Sociedade de Turismo e Diversões de Macau was granted the monopoly rights to all forms of gambling. The monopoly, which was created by the government to generate revenue, brought millions of gamblers from Hong Kong and China and was a boon for the family.
How big was this monopoly? In 2010, the gaming revenues for Macau rose to $28 billion, or four times that of Las Vegas – and Ho himself was the “King of Gambling”.
Stanley Ho’s family life was as prosperous and flourishing as his business affairs. He would go on to marry four women who would give him 17 children in total, as polygamy was legal in Hong Kong until 1971.
The Lanceford Dispute
Things began going sideways in 2011, when Stanley Ho underwent brain surgery, resulting in a seven-month hospital stay. In December of that year, Lansford, the parent company of Ho’s main business operations, issued nearly 10,000 new shares.
The bulk went to two holding companies. One was owned by his third wife and the other controlled by the children of his second wife. Together, they now owned a controlling stake in Ho’s massive operation.
Stanley Ho had long indicated his intentions were to divide his fortune equally amongst his families. Instead, he found himself with the bulk of his $3.1 billion fortune snatched from under his nose in what could only be described as a corporate coup.
The family members that benefited from this turn of events claimed that the share transfers were legally executed. In a lawsuit filing, Stanley insisted that he didn’t realize what he was signing due to his post-surgical mental fragility. He even posted a video on YouTube explaining his side of the story.
News of the messy family dispute quickly spilled out to media around the globe. Even more concerning, the day the dispute went public, the company’s shares dropped by 7.8 percent. Stanley Ho was left with two choices – he could fight a long, drawn-out court battle or act quickly to stabilize the share price and future of his company. Much to the delight of the shareholders, he opted for the latter.
In March of 2011, Stanley Ho announced that a deal had been struck among all branches of the family on the basis of “mutual understanding and mutual accommodation”. This arrangement was known to reduce Stanley Ho’s personal stake to almost nothing but ultimately preserved peace in the family and, perhaps more importantly, the corporate structure.
At the age of 96, Stanley Ho retired in June 2018 as chairman of SJM Holdings. It’s hard to say what the lesson is from the Ho family dispute. It appears to be a story as old as time – a powerful ageing tycoon and his ambitious family members with their eye on the throne.