Dispute among Ho family tragets stake in casino empire

A battle for control of one of the largest casino empires has resulted in tension among the family of ailing 89-year-old billionaire Stanley Ho.

Opposing members of the Ho family wrote letters contradicting and publicly accusing other members of the family of attempting to seize control of stake in SJM Holdings Ltd., the Hong Kong-listed operator of his prestigious Macau casinos. The total stake is approximated to be worth $1.7 billion.

Two of the most well known and powerful businesswomen in Asia are at the center of family feud. Mr. Ho has acknowledged 17 children from four different women, including one who died in 2004. Mr. Ho refers to his children's mothers as his wives, though it is unclear which—if any—of them are legally married to the gambling mogul. These four families form the core of the continuing fight.

Industry analyst claim the dispute is being prompted by resentment between wife No. 4 , Angela Leong, and Pansy Ho, one of five children from his second family. Ms. Leong carries an executive position in the family's flagship casino operation that was strengthened late last year when Mr. Ho gave her shares that boosted her stake to 8%, making her a top contender to control the casino business.

Pansy Ho, who is widely regarded as the head of the second family faction, is on the other side of the table. She has launched her own gambling franchise and is managing director of Shun Tak Holdings Ltd., the listed property and real-estate firm founded by her father. Pansy's siblings Daisy and Maisy hold executive positions at Shun Tak as well. Pansy's brother, Lawrence Ho, has set up a rival Macau casino. Together, those siblings form a block in the complicated holdings of Mr. Ho's empire.

Attorneys who claim they represent SJM Chairman Stanley Ho challenged the announcement of his succession plans, stating that certain family members "hijacked" his assets.

"This is classic, yet high profile case of poor estate administration planning" said one Harrisburg estate planning lawyer who has been following the case. "Unfortunately, when succession details are not clearly outlined, the result is typically in disputes." he adds.

Concerns over Mr. Ho's legacy started when he began feeling ill in August 2009, and shortly later, underwent brain surgery. He resigned from day-to-day management and began slowly targeting to whom portions of his Byzantine holdings would go to in his family.

Ms. Leong could end up with an even bigger stake and the upper hand in the casino, depending on which side wins. On the other hand, the children of the second wife, Lucina Laam, could have a larger and possibly controlling block in SJM. Macau law forbids holding more than one casino license, so it is unclear whether Pansy Ho wants to take the reins of her father's business.

An individual close to the family said Pansy aligned with Mr. Ho's third wife, Ina Chan, to counter Ms. Leong's rising power. In correspondence made public by his second and third families, Mr. Ho confirmed that he would provide a gift of his stake in his casino empire to his second and third families.

Monday's release of regulatory filings showed Mr. Ho had split his own SJM stake roughly in two, with slightly less than half going to the children of the woman he considers his second wife and the rest to the woman known as his third wife, leaving Mr. Ho with nearly nothing.

But in a surprising reversal, estate planning lawyers claiming to represent Mr. Ho later denied he had ever authorized the restructuring of his holding company and accused the second and third families of having "hijacked" his shares without his knowledge and threatened to sue his children to get them back. Instead of a two-way split, Mr. Ho said in a letter provided by lawyers at his law firm, Oldham, Li & Nie, that he always planned to share his part of the company in four equal segments among the families. "This has always been my intention and wish," Mr. Ho wrote in a letter dated Jan. 5 that was provided by the law firm, and addressed to Daisy Ho, a daughter from his second wife.

On Tuesday, representatives of families two and three released personal communications from Mr. Ho and his four families to prove their claim to a controlling stake in Lanceford Co., a vehicle that holds nearly one-third of Sociedade de Turismo e Diversoes de Macau, the company that controls SJM. The holders in the stake stand to benefit from a gambling boom in Macau, where revenue is expected to rise some 30% this year to about $35 billion, compared with $7 billion on the Las Vegas Strip.

Mr. Ho complained in a note to his daughter that she hadn't been returning his phone calls. "I have tried to call you and contact you and your secretary in order to come personally to explain to me what is going on. However, you have not responded so I have no other way but through this letter to command you to come to my house," he wrote.

Wednesday morning in Hong Kong, representatives of Mr. Ho's second and third wives released two letters. The first handwritten letter, saying that the tycoon was firing the law firm Oldham, Li & Nie and that the share transfer hadn't been made under any undue influence and that the divide of his empire was final.

"The recent stir over the Ho family has caused an uproar. I think it's time to put an end to this," he said in the note's message. "Family matters should not involve lawyers, and suing one another in the courts is troublesome! I also hope the media will not misunderstand. My health is very good, and there's no need for anyone to be concerned."

Mr. Ho claimed in an other statement that his decision to split the Lanceford stake was solely his: "Under no circumstances, did I receive any pressure or orders from anyone," the statement said.

Trading in SJM shares was suspended Tuesday. Royal Bank of Scotland Group PLC gambling analyst Philip Tulk announced shares in SJM could drop when trading resumes. "Ever since I've been covering this company, the concern has been about Stanley's succession plan. Those worries seemed to be going away, but now they look like they could come back with a bang," Mr. Tulk said.

The verbal back and forth could develop into a protracted legal battle among members of the tycoon's family, said an estate planning lawyer specializing in probate and succession cases and a member of the Hong Kong Law Society's Probate Committee. "Any move at this stage can potentially unleash a chain of lawsuits. This is about a huge amount of money," he said.