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From Russian gambit to CITIC paradise

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SCMP Reporter

WHILE the rest of the world still shivered in the icy chill of the Cold War, Lantau Island became the battleground for a strange Soviet-China standoff in the mid-1970s.

The collapse of an ambitious scheme to create a Monte Carlo-style casino complex on the island nearly left control in the hands of the Russians who had financed the plan, and Beijing fearing a Black Sea resort on its doorstep.

In the end, the Soviet bankers were ousted and a pair of Hong Kong Chinese tycoons installed. The Monte Carlo concept became more like Miami Beach with a southern Californian twist - and Discovery Bay was born.

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The yuppie enclave was in the headlines again last week and again facing the prospect of at least partial foreign ownership. China's huge Hong Kong-based investment corporation, CITIC Pacific, spent $3.4 billion for a 50 per cent stake in Hong Kong Resorts (HKR), which has steered Discovery Bay through the recurring controversies of the past decade and a half.

The selling price leaves HKR and its already cash-rich parent companies with an enormous investment armoury.

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''They have the biggest bank balance in Hong Kong right now,'' says one inside observer.

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