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Management still a concern for SJM after Dr Ho retirement: analysts

Sunday, 15 April 2018 14:45
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News of the retirement of Dr Stanley Ho has done little to quell concerns over management problems at Macau casino operator SJM Holdings, analysts say, with questions still remaining over the company’s long-term succession plans.

SJM announced late Thursday that Dr Ho, 96, would stand down from his role as Chairman at its annual general meeting on 12 June, with daughter Daisy Ho to be appointed Chairman and Executive Director in his place.

A re-shuffling of the board will see Angela Leong and Timothy Fok named Co-Chairmen and Executive Directors of the company with Dr Ambrose So elevated to Vice-Chairman, Executive Director and CEO. Dr Ho’s third wife Ina Chan has been recommended by the board for election as an Executive Director at the 2018 AGM.

But those appointments change nothing according to analysts, with Bernstein’s Vitaly Umansky, Zhen Gong and Cathy Huang stating that, “The entrenchment of existing management and governance at SJM continues.”

“Any major management/governance changes at the company are unlikely to materialize in the foreseeable future,” Bernstein said, pointing to news also unveiled last week that former Melco Resorts COO Ted Chan had been hired as Galaxy Entertainment Group’s new COO – Japan Development. It had been rumored that Chan was being scouted by SJM.

“With Galaxy’s hiring of Ted Chan … the hiring of a top-notch operator has been missed. We see no real positive changes to management that could turn the company in the right direction.”

JP Morgan’s DS Kim has described the new board structure as “a bit messy, with too many interested parties.”

“We would have hoped to see a clearer succession plan (a single chairperson would have been a good start), which in turn would enable the company to fine-tune the management team and structure before the opening of Grand Lisboa Palace next year,” Kim said.

“This complicated structure, in our view, leaves room for a potential power tussle within the board, given the lack of clear control.”

SJM remains the only Macau concessionaire yet to open an integrated resort in Cotai, with its HK$36 billion Grand Lisboa Palace not expected to launch until late 2019 at the earliest.

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