The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s intended purchaser yesterday said Macau ‘gaming king’, Stanley Ho, is not involved in its plans for the multi-billion dollar development, and emphasised its “commitment to integrity and good governance”.

Chow Tai Fook Enterprises (CTFE), in its replies to Tribune Business questions, moved swiftly to refute claims it was an ‘unsuitable’ investor for the Bahamas based on its principals’ continuing investment partnership with Mr Ho.

The privately-owned Hong Kong conglomerate, which is controlled by the family of the late billionaire, Cheng Yu Tung, effectively disassociated itself from the operations of Mr Ho’s Macau gaming interests.

Emphasising that the Cheng family were only investors in the latter’s Sociedade de Turismo e Diversões de Macau (STDM) concern, CTFE then turned its attention to dismissing allegations by former Baha Mar director, Dionisio D’Aguilar.

He claimed on Sunday that the Cheng family had been denied gaming licenses by regulators in the US states of Nevada and New Jersey, “for simply being unsuitable and unacceptable”.

However, CTFE said neither itself nor its principals had ever applied for a US casino licence.

And, implying that its gaming reputation was in ‘good standing’ with regulators throughout the world, the Hong Kong conglomerate said the $3 billion Queen’s Wharf consortium, of which it is part, had just been approved for a casino licence by Australian regulators.

CTFE’s responses to Tribune Business did not contain any details on its plans for Baha Mar’s casino operations, the group declining to reveal the identity of any brand/operating partner.

However, it emphatically rejected any suggestion that Mr Ho and his companies would be involved with the prospective Bahamian venture, which it described as “a unique growth opportunity”.

“The Cheng Family is an investor in Sociedade de Turismo e Diversões de Macau (STDM), which owns the gaming subsidiary, SJM Holdings Ltd (SJM),” CTFE told Tribune Business.

“In addition, the Cheng family’s role in the Macau casino is strictly as an investor, with no involvement in day-to-day management of the casino or oversight of the gaming industry in Macau.

“As a company, we are committed to integrity and good governance in all of our business operations worldwide. There will be no affiliation on this project with STDM or SJM.”

The statement seeks to draw a clear distinction between the Macau gaming scene and CTFE’s Baha Mar plans, while also separating the Cheng family from Mr Ho and his group’s daily operations.

This is effectively a direct riposte to Mr D’Aguilar, a key ally of Baha Mar’s original developer, Sarkis Izmirlian, and now the FNM’s candidate for Montagu in the upcoming general election.

Mr D’Aguilar’s allegations appear to be based on a May 18, 2009, report by the US state of New Jersey’s gaming enforcement division, dealing with a proposed Macau casino joint venture between MGM Mirage and Stanley Ho’s daughter, Pansy.

As disclosed by Tribune Business, that report focused on concerns that Macau’s VIP gaming rooms were vulnerable to exploitation by Chinese/Asian crime gangs known as Triads.

Mr D’Aguilar’s claims sought to link the Cheng family and CTFE’s publicly traded subsidiary, New World Development, to these activities via their investment in Mr Ho’s STDM and SJM companies.

However, while the New Jersey regulator’s report made adverse findings against Mr Ho, describing him as “unsuitable”, no such conclusions were reached about the Cheng family or their companies.

With no ‘smoking gun’ as such, the claims against the Chengs appear to fall short of their target, and seem overblown. For there is nothing that directly ties CTFE, its subsidiaries or the late Cheng Yu Tung and his family, to any wrongdoing or alleged links to the Triads.

CTFE sought to emphasise this point and its gaming ‘bona fides’ to Tribune Business, stating: “CTFE has never applied for a casino license in the US, and a consortium including CTFE has just been approved for the granting of a casino license in Queensland, Australia.”

The Hong Kong-based conglomerate said it would “provide a world class gaming experience at Baha Mar”, although it declined to reveal specifics.

It also said the omission of any reference to its casino gaming history, and expertise, was not contained in the original press release announcing its planned Baha Mar acquisition because these interests were bound up with its real estate development activities.

“The press release does indeed mention that CTFE has extensive experience with large-scale, integrated mixed use developments. By integrated developments we mean properties that also include casinos,” CTFE said.

“CTFE is a privately-held business based in Hong Kong that operates based on finding the best business opportunities globally......

“Our decision to expand into the Bahamas is based on our expectations that it is a unique growth opportunity. It also fits well strategically in our portfolio and overall growth strategies.”

CTFE also confirmed to Tribune Business that its ‘phased opening’ plans aligned with the desires of the Christie administration, as they included the casino hotel and casino; convention centre; golf course; and restaurants and shops.

It then revealed that it plans to redevelop “the offshore island”, likely a reference to Crystal Cay, the island that is adjacent to Arawak Cay off New Providence’s north coast, plus the former Crystal Palace casino.

“Our long-term vision is to build a financially successful, sustainable business that provides thousands of jobs for Bahamians and creates opportunity for reinvestment in the country,” CTFE said.

“Our goal is also to build upon and unlock the great potential of the project’s current foundation by redeveloping the offshore island and the Crystal Palace Casino Hotel property, as well as creating additional world-class amenities.”