Fri, Aug 30, 7:54am by Staff Writer
Hong Kong casino tycoon Lawrence Ho’s Melco Resorts will delay buying more Crown Resorts shares worth $880 million until after the New South Wales gambling regulator finishes an inquiry into the transaction and other probity issues concerning the Australian casino giant.
The sale could also be put on ice entirely if the inquiry results in conditions being put on the deal, which Melco and Mr Packer consider “unacceptable”.
The Age reports the shock announcement made late on Wednesday is the latest fallout from revelations by The Age, Sydney Morning Herald and 60 Minutes that Crown went into business with some “junket” tour companies backed by powerful Asian crime gangs and Chinese foreign influence agents.
The New South Wales Independent Liquor and Gaming Authority is preparing to release the terms of reference for an inquiry into those revelations as early as tomorrow.
It will also examine the sale of a 20 per cent stake in Crown from Mr Packer to Melco and Melco’s links to Mr Ho’s father, the Macau casino billionaire Stanley Ho, who has long faced allegations of links to organised crime.
Melco agreed to the stake in Crown worth $1.76 billion from Mr Packer in late May, with one 10 per cent block transferred shortly after and another 10 per cent set to change hands before September 30.
Melco Resorts said in a statement released to the Nasdaq stock exchange on Wednesday evening, Australian time, that it had agreed with Mr Packer’s private investment vehicle Consolidated Press Holdings to extend the closing date for the deal to 60 days after the inquiry has been completed.
A spokesman for Mr Packer’s CPH said while it did “not consider there has been any breach of agreement, licence condition or legislation… it has taken this step in agreement with Melco so the regulatory processes and ILGA inquiry can proceed in an appropriate manner”.
There are also clauses in the new agreement that could mean the sale will not go ahead at all.
Melco said the sale was subject to the ILGA’s inquiry being completed without any “restriction, objection, or conditions” being imposed on the deal, as a result that Melco or CPH consider “unacceptable”.
— The Sydney Morning Herald (@smh) August 28, 2019
CPH said that the sale would only go ahead if Melco received a written notice from the gambling regulators in Victoria, NSW and Western Australia – the three states in which it has casino licences – that it is a “suitable person” to be associated with running a casino.
The group also said that if the transaction is not completed by the “sunset” date of May 31 next year, which can be extended, then either party can terminate the deal.
Melco’s statement did not say what would happen in that situation to the 10 per cent parcel of Crowns shares it has already bought and paid for.
That list was made public for the first time earlier this week and shows that one of the banned companies is Lanceford Company Ltd, which Stanley Ho was a director of until shortly after the Crown transaction was made public on May 31.
Another company on the banned list, Great Respect Limited, owns 20 per cent of Melco International – the Hong Kong holding company which Mr Ho chairs and has a controlling stake in Melco Resorts, the Nasdaq-listed company buying into Crown.
Melco’s initial substantial holder notice in Crown lodged with the ASX also lists Great Respect as an associate company with a “relevant interest” in the Crown shares Melco agreed to buy.
The full terms of reference for the ILGA’s investigation are expected to be released as early as Thursday.
The regulator has not set a time-frame for its inquiry, which will have powers similar to a royal commission and be able to call people to give evidence in public hearings.
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