Thursday, December 14, 2006

Winnie Ho claims Sociedade de Turismo e Diversões de Macau owes her about 3
billion Hong Kong dollars, or $386 million, in dividends for the past five
years for her 8 percent stake. Winnie, 83, has filed more than 30 lawsuits
against her brother over alleged debt, defamation and the shareholding
structure of the companies. "We don't need all these lawyers if he plays by
the rules and the law and pays me back the money he owes me," Winnie Ho said
in an interview with Bloomberg television. "But that's just Stanley, always
thinking he can just walk over anybody." Sociedade de Turismo's
casino-operating unit has delayed plans to raise 15 billion dollars selling
shares in Hong Kong because of the court actions. The Macao casino market
has boomed since Ho's four-decade monopoly ended in 2002, as Las Vegas Sands
and Wynn Resorts built casinos and tourists flocked from mainland China.
Stanley Ho's law firm, Herbert Smith, said in a letter that he and his
company "refute entirely all of Madam Winnie Ho's allegations." Stanley Ho
will not comment further because of ongoing legal proceedings, the letter
said. A spokeswoman for Stanley Ho, Janet Wong, did not immediately respond
to an interview request. Winnie Ho helped run the company's casinos for 25
years before being fired as executive director in December 2001. She alleges
that shareholder meetings held by Sociedade de Turismo were improperly
convened. Stanley Ho has said the company lost the shareholders' registry.
Stanley Ho tried to buy his sister's stake in 2005 "at a very unreasonable
price," she said in the interview on Dec. 5. "So I told him 'why don't I buy
out your share instead.' He claimed he was not optimistic about the
company's future." Sociedade de Turismo controls 80 percent of Sociedade de
Jogos, or SJM, which operates the casinos. SJM had 5.56 billion patacas, or
$690 million, of net income in 2005, up from 4.04 billion patacas a year
earlier, according to the company's filing to the Macao Gaming Inspection
and Coordination Bureau. The company paid 11.4 billion patacas in dividends
to shareholders last year. Stanley Ho's stake in Sociedade de Turismo is
about 25 percent, though the family owns more. The Forbes 2006 Rich List
estimates his net worth at about $6.5 billion.

Macao, the only place in China where casinos are legal, awarded casino
licenses to a Las Vegas gambling tycoon, Stephen Wynn, and a Hong Kong
property developer, Lui Che Woo. Each license holder can issue a
subconcession license. Lui's was given to Las Vegas Sands, the world's
biggest casino company by market value.

Macao, a former Portuguese colony, was returned to China in 1999. Since then
there has been an influx of gamblers from mainland China.

The Macao economy expanded 11.4 percent in the third quarter. The city, a
special administrative region of China, attracted more mainland Chinese
visitors on individual visas than Hong Kong for the first time in September,
government statistics show.

SJM's share of Macao gambling revenue plunged to about 59 percent in less
than three years since Las Vegas Sands opened the first foreign-controlled
casino in the city, Anil Daswani, an analyst with Citigroup in Hong Kong,
wrote in an Oct. 12 report.

"We expect SJM to suffer market share losses for the rest of the year,"
wrote Daswani. SJM "is the biggest loser from the liberalization of the
industry."

The SJM market share may drop to 42 percent by the end of next year and to
20 percent by 2009, Daswani wrote.

"I know there's a lot of competition coming, but there's still a role for
SJM," Winnie Ho said. "The most important thing is for Stanley to give up
control of the company and get out."

Macao is vying with the Las Vegas Strip as the world's biggest casino
gambling hub. Macao took in 45.1 billion patacas in gross gambling revenue
in the first 10 months of this year, according to the government. The Las
Vegas Strip revenue for the year ended June 30 was $6.39 billion, according
to the Nevada Gaming Control Board.

Wynn Resorts earned $45 million in sales from the first 25 days of
operations of its debut Macao casino. The $1.2 billion Wynn Macao, which
opened Sept. 6, derived more than 81 percent of revenue from 212 gambling
tables.