NSW parliament launches inquiry into $1.75bn purchase by casino magnate Lawrence Ho, who was involved with a company banned from doing business with Crown

This article is more than 1 year old

This article is more than 1 year old

Hong Kong casino magnate Lawrence Ho bought almost 10% of Crown Resorts from James Packer at the same time as he was a director of a company banned from involvement with Crown due to its links with Ho’s father, Stanley, documents show.

Company documents filed in Hong Kong show until 28 June this year Lawrence Ho was a director of Lanceford Company Limited.

Lanceford was one of 59 companies and people described as associates of Stanley Ho who are banned from doing business with Crown under a previously secret condition of Crown’s licence to build a new casino at Barangaroo in Sydney.

On 30 May, Melco Resorts, where Lawrence Ho is chief executive and owns more than half the shares, agreed to buy almost 20% of Crown from Packer for about $1.75bn.

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Stock exchange filings show the first half of the shares were transferred on 6 June – the remainder are due to change hands by the end of September.

The list of companies and people considered associates of Stanley Ho, who was banned in 2014 from having any role in Crown Resort’s Barangaroo licence due to his alleged associations with organised crime, was tabled in NSW parliament on Thursday morning.

Within hours of the tabling, the NSW Independent Liquor & Gaming Authority announced that former supreme court judge Patricia Bergin will chair an inquiry into the proposed Packer/Melco shares sale.

The authority will also look at various matters raised in recent media reports published by the Nine Network, the Sydney Morning Herald and Melbourne’s the Age relating to Crown Resorts.

These include that the AFP had been investigating allegations of money laundering at Crown’s Melbourne casino at the time the NSW regulator was conducting its probity review into Crown’s suitability to operate a high-roller casino at Barangaroo in 2013-14.

The publications also reported that millionaire Huang Xiangmo, who has been banned by Asio from entering Australia because of alleged Chinese influence operations, was a regular $800m a year gambler at Crown Melbourne.

Separately, the Guardian revealed the Melbourne casino’s regulator is not satisfied Crown has done enough to combat money laundering risks and make sure alleged criminals are kept off the property.

In a statement released to the stock exchange on Thursday night Crown said it would “fully cooperate in relation to this inquiry”.

The previously secret list of banned companies and persons associated with Stanley Ho does not include Lawrence, Stanley Ho’s only son, or Melco, which was a business partner of Crown for a decade.

However, the list does include three of Lawrence’s sisters, who serve as directors in Stanley Ho’s labyrinthine empire, and two of Stanley Ho’s wives, including Angela Leong, who is a serving member of the assembly governing Chinese gambling enclave Macau.

Stanley Ho and Pansy Ho were adversely named in by New Jersey regulators who were considering MGM Mirage’s investment in the Borgata casino in Atlantic City in 2010.

Ho let criminal gangs “operate and thrive” inside his casinos, the New Jersey Division of Gaming Enforcement said. The division found that Pansy Ho, his daughter, was dependent on him and his money and remains under his influence.

The regulators concluded that Pansy Ho was an “unsuitable” business partner of MGM Mirage in the Chinese enclave of Macau and gave MGM Mirage the option of cutting ties to her or selling its 50% share in the New Jersey casino. It opted for the latter.

The 2014 agreement between the NSW Independent Liquor & Gaming Authority and Packer’s company Crown Resorts for Barangaroo reveals the deep concerns that the regulator had about any ties with Stanley Ho and the possible risk of infiltration by organised crime into the proposed high-roller casino in Sydney.

The agreement contains a section entitled “Prevention of associations with Stanley Ho”.

It says Crown will “ensure that it prevents any new business activities or transactions of a material nature between Stanley Huang Sun Ho or a Stanley Ho associate and Crown, any of Crown’s officers, directors or employees or any Crown subsidiary”.

The list of banned entities was released this morning after independent upper house MP Justin Field asked for the list to be tabled in parliament.

Field said the release of the list was important because “it sheds light on conditions that may relate to the recent purchase by Stanley Ho’s son, Mr Lawrence Ho’s Melco Resorts and Entertainment, of a 19.9% stake in Crown Resorts”.

“Given the recent revelations relating to Crown’s operations in Australia and overseas including the associations with junket operators linked with organised crime and, in particular, money laundering, more scrutiny is needed on the operations of Crown,” he said.

The Hong Kong company documents show the three banned sisters - Pansy Ho, Daisy Ho and Maisy Ho – are also directors of Lanceford and reveal its shareholders are two British Virgin Islands companies that are also on the banned list, Action Winner Holdings and Ranillo Investments.

The list also includes two companies listed on the Hong Kong stock exchange that are dominated by the Ho family, SJM Holdings, which runs casinos in Macau, and Shun Tak Holdings, a conglomerate with interests spanning property development, hotels and ferries.

Shun Tak and Melco do business together to transport gamblers from Hong Kong to Melco’s casinos in Macau, the only territory in China where casino gambling is legal.

Shun Tak’s most recent annual report shows that, since October 2016, it has had a deal to sell tickets to its ferry between Hong Kong and Macau to Melco.

Last year, Melco bought HK$31.8m (about $6m) of tickets from Shun Tak under the arrangement, which expires in three years.

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Not included on the list of Stanley Ho associates tabled in parliament were 37 companies Shun Tak listed in its annual report as subsidiaries and another six listed as SJM subsidiaries in that company’s report.

The documents tabled in parliament at Field’s request also reveal that Crown bitterly resisted having the list released in its submissions to arbiter Anthony Mason.

Mason, the former chief justice of the high court, was scathing of Crowns’s attempts to keep the list secret, concluding that “the subject matter is obviously a matter of potential and legitimate interest to the House”.

Crown tried first to oppose the release and then to restrict access of its concerns to the arbiter only.

But these have been released too. Crown argued “there is a genuine risk that Crown Resorts competitors and those who oppose Crown’s business would be able to misuse the information in order to gain an unfair commercial advantage or disrupt Crown’s business.”

Crown, Melco and the NSW gaming minister, Victor Dominello, have been approached for comment.