As John Story packed his desk at Echo Entertainment group, a casualty of James Packer’s campaign for control, Genting Group quietly bought a small strategic stake in the ailing casino operator.
It picked its timing well. It took a few hours for everyone to digest Story’s exit, but one commentator at the time, Stephen Mayne, said the Genting buy-in was of greater significance to Echo’s future.
James Packer seems to agree. Two weeks ago, he travelled to Macau to meet with KT Lim, the head of Asian casino conglomerate Genting Group. He told The Australian before his meeting: “I think KT Lim has done an amazing job building his company.” An unnamed company source elaborated, saying there was an “80% chance Mr Lim is friend, not foe”.
Under the New South Wales gambling laws, no single shareholder can own more than 10% of a gambling company. This means Packer, through Crown, which he chairs, and Lim, through Genting, cannot control more than 10% of Echo each. But should Packer succeed in convincing the authorities in New South Wales to let single shareholders up their stake to 20%, the two companies could control nearly half of Echo between them. Genting’s stake is currently 9.883%. After the initial buy-in, it’s been quietly but steadily increasing its stake, securing another 2.8% of Echo on Monday. And today, reports reveal it has appointed CIMB, Malaysia’s biggest investment bank, to advise it on its bid, and public relations firm FTI Consulting to ease its entry into Australia.
So are Packer and Lim friends, or rivals? It’s difficult to know what to make of their meeting. It points to the two moguls working together, or at least talking, but should Genting make a bid for outright control, it could spark a bidding war for Echo. Genting’s appointment of CIMB and FTI Consulting suggests this is a possibility.
So, who is KT Lim, the man complicating all of Packer’s best-laid plans?
KT Lim is short for Lim Kok Thay. Like Packer, Lim is a savvy businessman whose powerful father, Lim Goh Tong, gave him a leg-up.
The elder-Lim’s rags-to-riches story is one often told in Malaysia. He left Fujian province in China for Malaysia in his youth, and made a fortune in construction. While trying to raise money for a resort in the hill country outside Kuala Lumpur, Lim Goh Tong (G.T. Lim, to use the conventional Westernisation) persuaded the then-Prime Minister to grant him a casino licence, Malaysia’s first, as they dined at the proposed resort. The Prime Minister, against all expectations, agreed, and well, the rest is history.
KT Lim, who was 17 when is father clinched his first casino license, is the only one of his father’s children today involved in the business. A graduate of Harvard Business School and the University of London (where he studied engineering) the second son of GT Lim joined the company as a director in 1976. When his father retired in 2000, KT Lim became the CEO and chairman of Genting Berhad, the holding company which controls Genting Group, the sprawling Malaysian conglomerate which operates large casinos in Singapore, Malaysia, Hong Kong, the United Kingdom and United States, Egypt, South Africa and Lebanon.
Genting was forced to expand outside its country-of-origin because building more casinos in Muslim-majority Malaysia isn’t likely to fly with the regulators there. It operates the only gaming resort in the country.
Despite a handful of setbacks, notably in the United States, its expansion plans have been broadly successful, swelling its coffers, and those of Lim. It’s become the largest operator of casinos in the United Kingdom.