SJM wins listing battle but delays trading debut
Neil Gough and Wong Ka-chun
Casino magnate Stanley Ho Hung-sun's SJM Holdings yesterday won a major legal battle against Mr Ho's estranged sister, Winnie Ho Yuen-ki, but was forced to delay its market listing by a week and offer refunds to investors who have bought into the HK$3.85 billion share offering.
A High Court judge yesterday refused Ms Ho's last-minute application for a judicial review of decisions by the stock exchange and the Securities and Futures Commission that had paved the way for the listing to proceed.
Mr Justice Anselmo Reyes ruled that Ms Ho's case was 'not reasonably arguable and does not have a realistic prospect of success'.
Despite the courtroom victory, SJM said earlier in the day that it would be forced to postpone the launch of trading in its shares until next Wednesday because of legal proceedings.
The shares were originally set to begin trading this morning but the company said in a supplementary prospectus issued yesterday that the prospect of a judicial review or 'similar and other proceedings' might cause its shares to be suspended or delisted from the stock exchange, or otherwise see their value 'significantly diminished'.
In addition to making the new risk disclosures, SJM took the rare step of allowing investors who have bought shares in the initial public offering the chance for a full refund.
The offer would expire at 5pm tomorrow and partial refunds would not be issued and withdrawn share applications were irrevocable, the company said.
SJM chief executive Ambrose So Shu-fai yesterday welcomed the High Court's decision and said the decision to delay the listing was taken to protect investors' interests and give them an option to further consider the circumstances.
'No retail investors have cancelled their orders and I am not worried about the response from institutional investors as they are very familiar with our company and should know about the legal charges,' Mr So said.
SJM's retail offer was 1.17 times subscribed and the institutional tranche was 'moderately oversubscribed', the company said.
Revised results of the share sale - taking into account withdrawals - will be published on Tuesday.
Despatch of refund cheques will coincide with the launch of trading in the shares on Wednesday.
Ms Ho, whose feud with her brother has resulted in 37 ongoing lawsuits in Hong Kong and Macau, issued a statement following the court ruling, saying she was discussing options with her lawyers as to whether to launch an appeal.
'The court's decision has no doubt transferred all the potential risks to the public and institutional investors,' she said in the statement yesterday.
Mr Justice Reyes rejected all the major points presented on Tuesday by Ms Ho's counsel, Martin Lee Chu-ming, including a claim that listing SJM was against public interest because gambling was illegal in Hong Kong.
Ms Ho worked for SJM's parent company, Sociedade de Turismo e Diversoes de Macau (STDM), for 25 years until 2002 and retains a 7.34 per cent stake (according to SJM) or slightly more than 8 per cent (according to her).
Mr Justice Reyes noted 'the irony of the applicants claiming to champion a public interest against gambling when the applicants themselves reap the profits of STDM's gambling business'.