The Malaysian Insider understands that businessmen linked to MCA and the Cheng family together with Filipino gaming tycoon Roberto “Bobby” Ongpin are the front runners to take over billionaire Ananda T. Krishnan’s Pan Malaysian Pools Sdn Bhd gaming company.
It also understood that property and gaming magnate Tan Sri Yap Yong Seong’s Olympia Industries have dropped out of the race for the gaming firm which has 24 per cent of the local market.
“Those linked to MCA have put in an attractive bid but some party leaders are against the move,” a party source told The Malaysian Insider.
The expected sale is part of a restructuring by Ananda’s Tanjong to be syariah-compliant and tap the Middle East and North African markets together with those in South and South-East Asia to expand the power-generation business.
“The bidders haven’t shown their money although MCA is sitting on cash pile and can easily fund the bid,” the source added, referring to the party’s Huaren Holdings RM1.28 billion cash pile after it sold its 42.4 per cent stake in The Star publisher, Star Publications (M) Bhd, to the party in early November.
Other sources said the Najib administration is not keen on the Barisan Nasional (BN) senior party re-investing in the gaming sector, as it used to when it previously owned Multi-Purpose Holdings Bhd, which owns Magnum 4D Bhd, a numbers forecast operator (NFO).
A source also said that businessmen aligned to MCA’s Huaren Holdings are still working on a bid despite party president Datuk Seri Dr Chua Soi Lek denying The Malaysian Insider’sreport on November 10, 2010.
MCA’s investment panel head Tan Sri Dr Fong Chan Onn had previously met with Tanjong officials over the deal.
“The businessmen are acting for Huaren. They want to run Pan Malaysian Pools and use the profits for Chinese education,” the source added.
Of the other bidders, the most serious is the Cheng family, which is involved in the gaming slot machine business, mostly in the Klang Valley.
The family is led by patriach Datuk David Cheng, whose son, Datuk Douglas Cheng, had teamed up with Datuk Vincent Tan Ting Wong and Henry Yip to establish the popular Chinese restaurant chain Dragon-I in 2004.
A key player in any deal is Ongpin, a Marcos-era trade minister, who has built a sizeable property, telecommunications and online gaming ventures in the Philippines. It is understood that the Filipino magnate could be a partner for the bid with the Cheng family.
Tanjong’s gaming arm, Pan Malaysian Pools Sdn Bhd, reportedly has about 24 per cent share of the local market. Tycoon Tan Sri Vincent Tan’s Berjaya Sports Toto Bhd’s market share is about 40 per cent while Magnum Corp Bhd’s holds 36 per cent.
While the NFO business is the cash cow in its gaming business stable, Tanjong has been losing money from its horse-racing operations.
According to reports, the losses from the racing operations could reach up to RM80 million in the current financial year.
The losses arise from a number of causes. It is said that the Selangor Turf Club is profitable but not those in Penang and Perak. Furthermore, the racing operations are hamstrung by annual cash payments to each of the three turf clubs.
Industry observers said the business, which has been modernised with the introduction of telephone betting, was lagging behind the illegal business which could source bets from punters through the Internet.
This has proved to be a lucrative avenue for illegal bookies who are said to make around four times what the turf clubs can pull in on any racing day.
It is learnt that the new owners of Tanjong will offer new gaming products to ensure better returns apart from asking for a reduction of government taxes.
Foreign bidders will probably not be penalised in the bidding process if they pair up with a local partner with knowledge of the industry. Multi-Purpose Holdings Bhd in a partnership with CVC Asia Pacific Ltd completed the privatisation of Magnum in 2008.
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