By P. Gunasegaram
Before you take Tiger for a fraud, read the tail, oops I mean tale, first. The way things are turning, it is more than possible that there will indeed be a casino in Johor. It all started with the sale – of an asset belonging to Berjaya Assets – to the Sultan of Johor for RM250 million at a loss of nearly RM150 million to Berjaya Assets .
In Sept 2006, when our neighbour across the causeway was on the way to calling for tenders to build two casinos, this Tiger, then with The Edge, had occasion to write an article titled “We need another casino”. Now, over seven years later, Tiger is amused to find out that it may actually materialise.
The article basically argued that as Singapore builds its two casinos, Malaysia should build its own in Johor Baru to attract Singaporean customers, in the same way that the Singapore casinos will attract Malaysian customers. Unfortunately, the link to that article no longer exists, which forces Tiger to provide some relevant extracts to give a flavour for what it is about.
Here they are: “So who will be the main customers for Singapore’s casinos? You guessed it – Malaysians; Malaysians for whom the casino at Genting may be a tad too far such as for those living in Johor Baru and its environs. For them, a hop, step and jump will take then to the Singapore casino.
“Now the important question – Do we have to lose these people to Singapore? No, of course not. If we set up a casino in that new development called Danga Bay, in Johor Baru they will just go there instead of Singapore. Of course Muslims would be barred from the casino as is currently the practice at Genting.
“Now here’s the clincher. This casino will be a tourist draw for us as well. We can use it to attract tourists from all over the world – and since it is just a hop, step and jump from Singapore, we can target the tourists coming there as well by astute marketing and offering the right attractions.
“And we will give Singapore a taste of its own medicine – its not tit-for-tat – let’s just call it economics and business and tell them no hard feelings. We will attract the rich, affluent Singaporeans who can’t gamble in their own country to come over here and gamble.”
That extract about sums up the rationale for a casino in Johor Baru. So what makes Tiger think that now, just over seven years after the article was written and some years after Singapore’s two casinos are already in operation, that there will be one in Johor Baru?
Vincent Tan
Recently, Berjaya Assets (BA), a listed property company controlled by tycoon Vincent Tan, announced a rather interesting deal – it was selling a 20% stake in its principal subsidiary, Berjaya Times Square Sdn Bhd (BTS) to none other than the Sultan of Johor under an agreement dated Dec 9.
Interestingly the sale for RM250 million incurs an extraordinary loss of nearly RM150 million because it was being sold at a substantial discount to its net book value, raising questions as to why it was doing so. BTS owns the Time Square building in Kuala Lumpur and is rapidly building up a property base in Johor Baru.
Pressed by Bursa Malaysia as to why it was doing so in a series of eight questions, BA explained that its own shares were also selling at a steep discount to its net asset value and the deal was negotiated on a willing-buyer-willing seller basis, taking into account as well “the business acumen and stature of DYMM Sultan Ibrahim”.
The latest The Edge weekly dated Dec 16 reported that BA has big plans to transform its Johor Baru land into a “huge entertainment resort with a chain of high-end restaurants and posh clubs, possibly spiced up with slot machines.”
What attracts attention is the part about slot machines which would be just a step away from a casino. The Edge daily meanwhile reported that BA may be interested in replicating its Bukit Tinggi resort on the foothills of Genting Highlands in the BTS-owned Berjaya Waterfront project in Johor Baru near the Causeway.
Putting all that together and with a powerful partner such as the Johor Sultan it would not be too far-fetched to say that there may well be a casino-cum-entertainment complex ala Singapore in Johor. By the time all approvals are received – and there is no certainty all approvals will be received – and construction done, it may still be another three to five years away, 10-12 years after Singapore did it. But better late than never, as they say.
Sultan Ibrahim Ismail
Because of the Sultan’s power and influence, it is highly likely that the state authorities may not stand in the way of such development, especially since there are compelling business and economic reasons. But the federal authorities, whose nod is apparently also required, may balk over any talk of slot machines let alone casinos, especially given the increasing assimilation of Islamic values.
The BA sale of the 20% stake in BTS is one of the deals which mark the public ascendency of the Johor Sultan into business, the earlier one being a sale the Sultan made of 116 acres of prime land in Johor Baru to Hong Kong-listed Guangzhou R&F Properties Co for a massive RM4.5 billion.
The bottom line is that BA has found a rather valuable partner in the Sultan, and given its extensive property interests in Johor and despite its sale of the 20% stake in BTS at a considerable discount of some 37% to net asset value, the benefits are likely to outweigh the discount even if that casino does not materialise.
Tiger meanwhile is quite curious to see if that casino will emerge or whether it will remain a tantalising mirage. And no quips about what curiosity did to the cat, please.
GRRRRR!