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Billionaire Quek Building New Gaming Empire



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Feb 09 2007
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The Malaysian billionaire, Quek Leng Chan is synonym with Hong Leong Bank Berhad (KLSE: HLBANK, stock-code 5819), one of the remaining Chinese-owned banks in Malaysia after banking consolidation initiative pushed by the Malaysian government 10-years ago. Unlike other banks which need bail-out from the government in order to survive, Hong Leong Bank managed to sail out from the rough sea of 1997 Asia Economy Crisis. The crisis could be a blessing in disguise for most of the Chinese-based companies in Malaysia as it gave them two major indications.
One, if their companies are Chinese-majority owned, then they are on their own comes any new internal or external financial crisis without much assistance hope from the government (the government would itself too busy ailing bumiputra companies). Two, in order to continue surviving they need to expand out of Malaysia for new prospect as the local market is already crowded due to too many players eyeing a small market (Malaysia has 27 million population only).
Quek Leng Chan is a very low-profile businessman. He rarely appears on any business news and when he made a headline, you better pay attention as it will give you some indication where he’s heading to on his next business course. After the “hostile” takeover of Southern Bank Berhad (one of the most profitable and well-managed Chinese-based banks) by CIMB Group whose chief executive officer, Datuk Nazir Razak who is also the brother of current Deputy Prime Minister, Najib Razak, the writing is already on the wall that having an anchor bank status is not a guarantee that your bank built with decades of hard-work will not be taken over by force.
In a dog-eat-dog business world, it’s already hard to compete within the same sector, what more if political pressure is being used to swallow you up alive. Perhaps with all the messages since the 1997 Crisis and the Globalization, Chinese conglomerates in Malaysia have already started to look elsewhere to divert or relocate their wealth in the name of diversification. Even Robert Kuok, another self-made billionaire has recently announced Kuok Group Consolidates To Defend Palm Oil Business.
Genting Berhad (KLSE: GENTING, stock-code 3182) through its’ subsidiary Genting International (SIN : G13) and Star Cruise Ltd (SIN : S21) recently won the Singapore second casino on the Sentosa Integrated-Resort (IR) island projects after lost a bid earlier for the first casino license in Singapore to Las Vegas gaming giant Las Vegas Sands Corp. (NYSE : LVS, quote). And the most recent buzz on the gaming industry was the partnership of Genting, Stanley And Chua – The New Three Musketeers but somehow Singapore Was Offended By The Deals.
And it seems Quek Leng Chan is serious about venturing into gaming industry himself having created two important headlines within the start of the 2007 New Year. Quietly, Quek who controls the Thistle Hotel chain has grabbed 25 of the 89 casino licenses awarded in Britain in the past two years. That is a remarkable 28% of permissions granted; a major coup for Quek Leng Chan who also owns Mayfair’s up-market Claremont casino. Others operators include:
  • Stanley Leisure (owned by Genting Group) – secured licenses for 16 sites
  • Rank of Grosvenor chain – secured 15 licenses
  • Aspinalls – secured 5 licenses
  • Gala – bagged 3 licenses
  • Ladbrokes Plc (LON: LAD), London Clubs and 12 other operators – 1 licenses each

The second headline catches today news when it was announced today that
Quek buys 19.4% stake in MPHB for RM319 Million. Quek purchased 129.38 million shares and 95.62 million warrants in Multi-Purpose Holdings Berhad (KLSE: MPHB, stock-code 3859) at RM1.80 a share and 90 cents a warrant respectively. Multi-Purpose owns Magnum Corp Berhad (KLSE: MAGNUM, stock-code 3735), the number forecast operator.

It doesn’t take a rocket scientist to conclude where Quek Leng Chan is moving forward with the above headlines. Back in late Dec-2006, Quek was rumored to buy between 12 and 15 per cent into Kencana Petroleum Berhad (KLSE: KENCANA : stock-code 5122) but it has since been denied. It makes perfect sense to venture into gaming industry regardless whether it’s for long-term business plan or as an investment. You have to remember you’re dealing with a man who made billions of profit when he sold its Hong Kong bank Dao Heng to DBS Group Holdings Ltd (SIN: D05) for S$10 billion (HK$49.34 billion) in 2001. Maybe Quek sensed that his command-ship of Hong Leong will not lasts for long and he needs to prepare to jump boat when the time comes.

# TIP: I wouldn’t chase MPHB or MAGNUM stocks with the current high composite index which looks to start the major consolidation but will start accumulation in stages once it pull-back.

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