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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

AsiaweekTimeAsia NowAsiaweek story

FEBRUARY 4, 2000 VOL. 26 NO. 4

Many Losers, But Few Winners
BW Resources' Tan says he also is a victim
By JONATHAN SPRAGUE and ANTONIO LOPEZ Manila


Tan (right) bet that casino King Stanley Ho would complete his royal flush, but the cards are not going his way Edwin Tuyay for Asiaweek
BW Resources once looked like a sure thing. The Philippines gambling concern had the backing of President Joseph Estrada. Its shares were rocketing on the stock market. And it had snagged a $30-million investment from Macau casino mogul Stanley Ho and signed him on as chairman. Then the lucky nag turned into a laggard. Its stock dropped like a stone, prompting investigations by market regulators. Estrada found his previous support of the company had turned into a jinx after he allegedly pressured the Securities and Exchange Commission (SEC) to ease off. And Ho found himself under fierce attack from the Catholic Church, which opposes gambling, and from anti-crime activists, who accuse him of having links with triad gangsters. "I have never been attacked like this," Ho complained to Philippine reporters last week. "If I am really unwelcome and if President Estrada says, 'Stanley Ho, I am sorry I could not encourage you to invest anymore,' then I quit."

At the center of it all is Dante Tan. Last year he was on his way to becoming the Philippines' gambling czar. Now he is being vilified as the man who nearly sank the nation's stock market and still may sink the president. But Tan, 50, is having none of it. "Some people are out to destroy me, and in the process attack the president," he tells Asiaweek. "My business rivals are out to bring me down, while the president's opponents are out to embarrass him by hitting me." The would-be high roller began his career as a small town accountant and tire dealer in Quezon province, south of Manila. His friendship with Estrada dates back to the latter's campaign for the Senate in 1987. Tan formed Best World Gaming and Entertainment Corp. (BWGE) in early 1998 and applied for a license to operate on-line bingo nationwide from the state-owned gambling agency and casino operator, Pagcor. He was turned down. After Estrada became president in June, Tan tried again. In December, he finally got it.

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That was just the start. Also in early 1998, Greater Asia Resources, a listed leisure and tourism company headed by Dante's friend Eduardo "Moonie" Lim, changed its name to BW Resources Corp. Dante began accumulating BW Resources shares in early 1997 and eventually became its major shareholder. BW Resources began its climb to notoriety in March 1999 when it acquired the Sheraton Marina Square complex overlooking Manila Bay, then under construction. In June, word spread that BW Resources was talking merger with Tan's privately-held BWGE, which had begun lucrative bingo operations that same month (President Estrada was guest-of-honor at the launch). In July, Pagcor said it would operate a casino in Sheraton Marina Square. And in October, BW Resources brought in Stanley Ho as investor and chairman. To the drumbeat of the news, BW Resources shares marched from around 2 pesos in January to 107 pesos in October, the kind of gain usually confined to Internet stocks. Then, shortly after Ho made a triumphant visit to Manila, the shares plunged to under 30 pesos.

The collapse sparked charges that the previous run-up had been the result of market manipulation and insider trading, and the SEC and the Philippine Stock Exchange (PSE) began investigations. Preliminary reports found that heavy buying by Tan from February to May lay behind BW Resources' initial gains. Then from June to October, Tan sold shares to friends and clients at a discount - but they were executed on the PSE board at prices that were sometimes over twice the amount actually paid. Trade in the shares, which occasionally reached half of total daily turnover by value, centered around just 10 brokerages. Many brokerage officers and relatives were active traders, including some with links to BW Resources, such as PCCI Securities managing director Francisco Liboro, who is married to BW president Eduardo Lim's sister Elvira. But did anyone break any laws or regulations? The PSE is not saying, only promising to finish its investigation by mid-February.

Tan says he has done nothing wrong. While he did sell some shares at a discount, he says neither SEC nor PSE regulations bar such deals. And Tan reckons he still owns 15% to 20% of BW Resources, including some 20 million shares he bought at around 100 pesos each. "I am really a victim, rather than an offender," he contends. "I could have made a lot of money but I didn't do it. I have held on to the shares and kept on building the company." Meantime, BW Resources is indeed going about its business, completing its acquisition of BWGE in December, continuing construction of the Sheraton Marina Square (due for completion in 2001), and looking for a television station to complement its bingo operations. "BW Resources is still a very viable company with viable projects," Tan says. Maybe so. Stanley Ho says he will decide soon what to do about investing in the Philippines (Estrada, his fingers burned, says he will not go out of his way to woo Ho), but New Zealand-based Savoy Group may pump in fresh funds. BW Resources' shares remain volatile, swinging between 8 and 12 pesos this week. Anybody care to make a bet?

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