August 9, 2019 / 5:28 AM / 2 months ago

Melco says no truck with Stanley Ho, as Australia probes $1.2 billion Crown deal

(Reuters) - Melco Resorts & Entertainment said on Friday its CEO’s father, who had been investigated by Australian authorities, was not involved in its business, as the gaming firm’s $1.2 billion stake buy in peer Crown Resorts came under regulatory scrutiny.

A general view of Melco Crown's Studio City, as a 130m high Ferris wheel is seen on top of the resort, in Macau, China October 26, 2015. REUTERS/Bobby Yip/Files

An Australian gaming regulator had said a day earlier it will investigate Melco’s planned $1.2 billion stake purchase in Crown Resorts following local media reports that Crown flouted rules to lure big Chinese gamblers to Australia.

Shares of Australia’s Crown Resorts fell as much as 2.3% on Friday to their lowest level in more than five months on news of the probe.

Melco had announced in May that it would buy a 20% stake in Crown Resorts from casino mogul James Packer’s investment company CPH Crown Holdings for A$1.76 billion ($1.20 billion).

The deal triggered a regulatory review into Crown’s prized $1.5 billion Sydney casino by the gambling watchdog in May. The regulator had given its nod for the casino in 2014 on condition that Crown would not do business with Stanley Ho who at the time was under investigation in Australia and the United States for possible ties to organised crime.

Ho, a billionaire, is often referred to as Macau’s gambling godfather.

Melco said in an emailed statement to Reuters on Friday that Stanley Ho did not hold any position in the board of the company or any of its related entities, and is not involved in the company’s business operations.

“(Stanley Ho) does not exercise any influence on any financial and operating policies or other matters of these companies,” the Melco representative said. The statement also said Melco will cooperate with the gaming regulator’s probe into the Crown stake purchase.

The gambling watchdog had also said on Thursday it would look into “various matters raised in recent media reports” on Crown.

Last month, The Age and the Sydney Morning Herald newspapers and the “60 Minutes” television programme reported that Crown hired tour operators with ties to drug traffickers to bring wealthy Chinese gamblers into its Australian casinos, among other things. Crown has refuted the reports.

Crown said on Thursday it would “fully co-operate” with the regulator’s investigation.

($1 = 1.4695 Australian dollars)

Reporting by Devika Syamnath in Bengaluru, Additional Reporting by Ambar Warrick; Editing by Muralikumar Anantharaman

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