Property tycoon Cheng Yu-tung has quietly entered the Philippine gambling market in a big way, snapping up the prestigious Hyatt Hotel & Casino Manila. According to Philippine government officials and corporate registration documents obtained by The Standard, the New World Development chairman's family, which controls the New World conglomerate and the Chow Tai Fook jewellery chain, is the owner of the new Hyatt Hotel & Casino Manila.
Once fully developed, the casino is to be the largest in the country, according to the hotel's press announcement.
Neither Hyatt nor Cheng's investment company would confirm the family's involvement.
Their reticence may reflect Cheng's desire to avoid being publicly linked to a project that played a role in a scandal involving former Philippine president Joseph Estrada and a business partner of casino tycoon Stanley Ho in the run-up to Estrada's overthrow three years ago.
At the time, Ho became the target of outrage in the Philippines, despite the fact that he was never implicated in the scandal.
Cheng is a director and major shareholder of Sociedad de Turismo e Diversoes de Macau (STDM), the firm controlled by Ho that operated as Macau's casino monopoly for 42 years. Ho is also president of Sociedad de Jogos de Macau, the STDM subsidiary that now operates the company's 12 casinos.
Gaming in the Philippines is a monopoly business, controlled by the government-run Philippine Amusement and Gaming Corp, or Pagcor.
Pagcor operates and staffs the new Hyatt casino as it does all casinos in the Philippines. But the Cheng family owns the gaming equipment and the premises and receives 40 per cent of casino revenue as rent, according to Pagcor spokesman Edward King.
``The advantage of this arrangement is we don't carry the risk,'' King said.
Risk is significant because the project's development dragged on for years through several changes of ownership. Sheraton Hotels, originally hired to manage the hotel, announced when it won the contract for the project that the hotel would open in 1999.
The first phase of the casino opened without fanfare in April, but the hotel only began taking guests just three weeks ago and its first restaurant will only open this month.
Spokeswoman Sharon Samarista said the hotel, which will eventually have 378 rooms and is located in the centre of Manila's Ermita tourist district, will hold its grand opening in December. Though the casino and hotel are part of a 94,000-square metre office and retail complex called Marina Square, King said that nothing else is open yet.
Because of construction delays, Pagcor has held off opening more of the casino, King said. The casino features 30 gaming tables and 309 slot machines but is to eventually offer 123 tables and 606 machines spread over four floors, according to the hotel's announcement.
Samarista would identify the hotel's owner only as New Coast Hotel.
New Coast's corporate filings with the Philippine Securities and Exchange Commission list CTF Hotel and Entertainment as the owner of all but five of its 621.4 million shares.
Henry Cheng, who is Cheng Yu-tung's oldest son and also managing director of New World Development and a director of Chow Tai Fook Enterprises, holds one share and is listed as president of New Coast.
Until last year, New Coast was owned by Megaworld, a company publicly listed in the Philippines. Megaworld's 2003 annual report put the value of the company's investment in the overall Marina Square project at 836.1 million pesos (HK$115.7 million) and said the investment was sold at carrying value.
Megaworld sold the Marina Square project in 1999 to a company called BW Resources. Late that year, Ho bought a 10 per cent stake in BW Resources and became its chairman, grandly announcing plans to open a floating casino and other ventures under the BW flag.
BW's stock price soared from two pesos a share to 107 pesos (HK$14.80) and officials, including then-vice president Gloria Arroyo, celebrated the return of Ho, who dominated the Philippine casino industry during the rule of strongman Ferdinand Marcos. When BW Resources' stock abruptly nosedived in 2000, official investigations began into potential stock manipulation by local businessmen tied to Estrada, principally Dante Tan, a close Estrada associate, who subsequently fled the country to avoid prosecution.
Estrada allegedly pressured investigators to go easy in their inquiry, and outrage at his interference helped fuel the protests against his rule that eventually led to his ouster in 2001.
Ho was never accused of any wrongdoing in the scandal nor was he charged but he was harshly criticised in the Philippine media at the time and he lowered his public profile in the country to near invisible.
In 2002 Megaworld resumed ownership of Marina Square.
A spokesman for Chow Tai Fook Enterprises said he was unaware of the project. Chow Tai Fook Enterprises is the Cheng family's private investment company.
New World Development, which is controlled by the Chengs, does own a 27 per cent stake in another Manila hotel, the New World Renaissance.
In March of this year, however, Ho returned to the country for the first time to receive an honorary degree from a Philippine university.
At the time, Ho promised to ``invest more in the Philippines'' but disclosed no specific plans and there is no evidence that he is involved in Cheng's Manila casino venture.