Macau gambling giant, Stanley Ho, finally was able to offer his IPO on July 16 after the seemingly endless delays caused by the roughly 40 motions filed by his sister, Winnie, over the past few months. His flagship company, Sociedade de Jogos de Macau Holdings (SJM), had initially hoped to raise $1 billion US dollars when the IPO was first planned back in January but ended up raising less than half of the hoped for amount.

The IPO was delayed at first due to a weakened Hong Kong stock market this past winter but then Winnie Ho filed motion after motion in an effort to derail the offering. The two siblings have been battling since 2001 when they became estranged. The 87-year old Winnie Ho had worked for SJMs parent company for 25 years and still remains a shareholder, despite Stanley Ho’s attempts to have her removed.

Last scheduled to be listed on July 10, Winnie filed another motion at the last minute in a desperate attempt to stop the IPO yet again. She sought an injunction against the offering citing several reasons that it shouldn’t go forward even to the point of saying it was “contrary to public interest and the longstanding policy of the Hong Kong government not to promote gambling.” In her latest court action, Winnie Ho claimed that she had been deprived unfairly of million of dollars in dividends. She further made the claim that she was not fairly compensated when the parent company transferred assets over to SJM.

Hong Kong’s Court of First Instance rejected Winnie’s bid to get a full judicial review of the Securities and Futures Commission’s decision to allow the IPO. Presiding judge, Anselmo Reyes, dismissed her arguments, saying that her public interest argument was contradictory to her being a shareholder in a company that profits from gambling revenue.

In his written ruling, Reyes said, “To put it starkly, if persons outside Hong Kong wish foolishly to lose money by gambling outside Hong Kong and thereby generate sizable profits for a company, why should people in Hong Kong not be entitled to share in that company’s profits from the foolishness of others?”

Stanley Ho operated a gambling monopoly in Macau for four decades until the market was opened up back in 2002. This drew large US gambling concerns like Wynn Resorts and Las Vegas Sands to the Chinese enclave. These new casinos eroded Ho’s market share increasingly through the intervening years. The IPO was an attempt to gain a large influx of investment. Unfortunately it was not the best timing given the current market and the IPO only raised $494 million US dollars, less than half of what was hoped for.

Stanley Ho’s timing wasn’t ideal in another way, as well. SJM’s stocks fell below its IPO prices in its first day on the open market due to investor concerns over the impact of upcoming travel restrictions. The Macau government announced several new travel policies set to start on September 1. The one causing the most trepidation for the gambling concerns is a policy that will require mainland Chinese tourists to have an entry visa to go into Macau. Much of Macau revenues have been dependent on mainland tourists so the restrictions could negatively impact the tourism industry as a whole and specifically the casinos in the territory.

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