Families need to be aware that family unity is good for business – look no further than the business empire of Stanley Ho to prove the point.
The Hong Kong and Macau-based Ho owns one of the biggest casino operations in the world under his holding company SJM Holdings. But he’s also 89 and still hasn’t addressed company succession.
Indeed, the casino billionaire has been so bad at handing over the ownership of the business to the next generation that he would make the actions of Shakespeare’s King Lear look amateurish.
Confined to a wheelchair and increasingly using lawyers to do his talking, Ho accused a couple of his “wives” (he has four women he calls his wives) and some of his 16 known children (no one knows exactly how many kids he has) of stealing shares in SJM.
As the feud escalated and lawsuits threatened, the share price in the listed part of SJM steadily dropped. It eventually slumped to a low of HK$10.58 at the end of February on the back of the family feud, compared with a high of $14.98 before all the arguing over ownership started.
But Ho and his advisers must have got the message that the feud wasn’t doing the business much good. So, a bit over a month after the outbreak of family hostilities, Ho announced a truce and said the issue of ownership had been resolved. The share price rebounded and everyone was happy.
Well at least for the time being – Ho hasn’t announced a successor, nor has he made public who gets what of the family business when he dies. Nervousness and share price volatility might yet prevail. Other dominant family leaders should heed the simple lesson of the Ho case; your share price is only as strong as the family ties that bind you.