Stanley Ho

Gaming checks send Star Cruises and Genting tumbling

PUBLISHED : Thursday, 01 March, 2007, 12:00am
UPDATED : Thursday, 01 March, 2007, 12:00am

Shares in Star Cruises fell as much as 21.4 per cent in Hong Kong trading yesterday and sister firm Genting International shed 17.07 per cent in Singapore at one stage after the city state's gaming regulator confirmed it was conducting suitability checks on the two firms in light of their planned investment in a HK$4.7 billion Macau casino to be operated by Stanley Ho Hung-sun.

The two units of Malaysia's Genting Group, which won a tender in December to build a US$3.4 billion casino resort on Singapore's Sentosa Island, had yet to be issued with a gaming licence in the city state, the Casino Regulation Division said in a statement on Tuesday.

'We will be conducting suitability checks on the relevant parties ... before the casino licence is issued,' it said in response to media queries about the Macau deal.

Genting International last night responded by saying it was working closely with the authorities.

Under Singapore's Casino Control Act, the gaming regulator has the right to investigate casino licence holders and their associates and the power to amend or block any venture, including overseas projects, whose partners it deems 'unsuitable'.

In January, the South China Morning Post reported the Genting firms' partnership with Mr Ho, which also saw the Macau casino magnate and his fourth wife, Angela Leong On-kei, acquire a 4.6 per cent stake in Star Cruises, would be subject to such an investigation.

Tuesday's statement by the regulator was the first official confirmation of the probe.

'This might spell the end of any tie-up between Star Cruises/Genting and Stanley Ho,' one industry source said. '[Mr Ho] has invariably refused to submit himself for probity investigation in jurisdictions outside Macau.'

Should the Macau deal collapse even due to regulatory issues, the Genting units would forfeit a HK$153.56 million deposit on the land, plus about HK$60 million consisting mainly of finders' fees paid to consultants who helped put the deal together.

Shares in Star Cruises ended the day down 5.68 per cent at HK$2.16. The close represents a 15 per cent discount to the share price on January 22, the day before the Macau deal was announced. Genting International lost 7.93 per cent to settle at 75.5 Singapore cents (HK$3.86).