Pansy Ho fails to file papers in US probe

PUBLISHED : Wednesday, 21 June, 2006, 12:00am
UPDATED : Wednesday, 21 June, 2006, 12:00am

Pansy Ho Chiu-king, the managing director of Shun Tak Holdings, had failed to file documents requested by gaming regulators in the United States conducting an investigation into her joint venture with MGM Mirage, sources said.

US investigators were interested in turnover and shareholding details of Shun Tak and other companies in the Ho family empire. Ms Ho has a stake in Sociedade de Jogos de Macau (SJM), which is controlled by her father Stanley Ho Hung-sun, and is a director of Sociedade de Turismo e Diversoes de Macau.

The investigators also want to know how independent Ms Ho is, given the fact that her father has dominated Macau's gaming industry for 40 years.

'The whole point is to get a clear understanding of who's going to be making the decisions and who has influence over those decisions,' a source said.

A clear paper trail is anything but easy to find in Macau's multi-tiered gaming industry. Most high-rolling VIP rooms in Macau, which have traditionally been the backbone of the gaming industry, are not run by the casinos but rented out to operators who pay a percentage of their gaming profits.

These operators reel in gamblers through travel agents that run gaming trips, known as junkets. The relationships between the casinos, VIP room operators and junket runners are typically informal.

Ms Ho declined to comment. Both MGM and the Nevada Gaming Commission did not return phone calls. The New Jersey attorney-general's office, which is overseeing that state's investigation, also declined to comment.

Both the commission and the attorney-general, through the Division of Gaming Enforcement, launched investigations last year.

The joint venture and the gaming commissions were likely to reach an agreement in the end, sources said. But if the findings go against MGM, either commission could revoke the company's licence to do business in that state, which would most likely prompt MGM to dissolve the venture.

According to the terms of the joint venture, for MGM to dissolve it, they would have to identify three buyers and go through an auction overseen by both Ms Ho and the Macau government.

Ms Ho would have the right to sell her stake in the venture to the winner of that auction. She would also have the option of bringing in another buyer to replace the winner of that auction.

MGM and Ms Ho announced the joint venture in 2004 after agreeing to pay US$200 million to SJM, one of three companies awarded a licence to operate casinos in Macau.

MGM invested US$180 million in the joint venture while Ms Ho put in US$80 million, for a 50 per cent stake.

Under the deal, Ms Ho is also allowed to appoint four of the seven directors, which would include herself and her sister Daisy Ho Chiu-fung.

MGM and Ms Ho plan to open a 28-storey hotel-casino development next year at a cost of U$1 billion.