Last Thursday, NagaCorp Ltd, which operates the NagaWorld casino resort in Phnom Penh, announced that Lip Keong’s son Cherchi’s employment as CEO of finance and treasury had been terminated with effect from May 16.
The filing with the Hong Kong Stock Exchange, where NagaCorp is listed, also said that Cherchi, 36, will no longer hold any other position with the company or its subsidiaries.
“Following the termination of his employment, Cherchi will also cease to be a director of NagaGroup Global Ltd and NagaCap Ltd, both of which are incorporated in Cayman Islands and are wholly-owned subsidiaries of the company,” it added.
Cherchi had held that portfolio since April 2022 when Lip Keong revamped NagaCorp’s management, bringing in three sons as joint CEOs with specific areas of responsibility.
His second son Yiy Fon, 42, was tasked with overseeing operations while Yiy Hwuan, 44, was put in charge of the group’s hotels.
The company did not provide a specific reason for Cherchi’s termination.
It only stated that the board reviews the senior management’s delegated function and work tasks from time to time, to streamline the internal corporate governance and management structure, and effectively carry out the group’s business strategies.
NagaCorp noted that apart from possible disagreement over the termination of his employment, Cherchi had “no other disagreement with the board” and there is no other matter which needs to be brought to the attention of the company’s shareholders.
Yiy Fon was given the driver’s seat after Lip Keong passed away in December last year, when he was redesignated as CEO of NagaCorp group, assuming the leadership responsibilities previously held by his father.
In July 2022, Lip Keong transferred his controlling stake in the company to a family trust – The Sakai Trust – which controls 69.26% of NagaCorp.
Earlier this month, the company announced details on the distribution of shares held under the trust which provides an insight into Lip Keong’s final wishes and whom he had favoured to lead the group.
The filings revealed Yiy Fon was given the largest allocation – 368 million shares or 8.3% of NagaCorp, worth about RM1 billion.
Four other sons – Yiy Hwuan, Yepern, Cherchi and Cien Then – were each entitled to 291 million shares, a 6.6% stake each in NagaCorp with each block valued at about RM800 million.
In addition, another 1.53 billion NagaCorp shares will continue to be held in trust for which all five sons are the beneficiaries.
Half-brothers
Yiy Fon, Yiy Hwuan and Yepern are half-brothers of Cherchi and Cien Then. The former three are the sons of Lip Keong’s first wife Lee Chou Sarn while the latter two are sons of Lip Keong’s second wife. All the brothers are directors and beneficiaries of The Sakai Trust.
When he undertook the leadership revamp in 2022, Lip Keong said via a NagaCorp statement that he hoped his sons would “work together as a team” to lead and manage the group to bring it to the next level of success.
However, the unceremonious sacking of Cherchi does nothing to bring Lip Keong’s hope to fruition. Instead, the brewing feud among the brothers means there will potentially be more fireworks in the Chen family saga moving forward.
Cherchi has yet to issue a statement on his termination from NagaCorp.
While he ponders his next move after having to exit the family business, he may be reminded of the advice he gave to young professionals in the gaming industry several years ago.
In an interview with Global Gaming Business Magazine in February 2021, Cherchi urged them to “work hard and persevere”.
“Not every day is going to be a bright, sunny day. There will be days of gloom, and you just have to tell yourself to look past the short-term gloom and look forward to a better day ahead.”
Lip Keong was Malaysia’s seventh richest individual with a net worth of US$2.8 billion (RM13.2 billion) as of May 2023, according to Forbes.
Trained as a medical doctor, Lip Keong had called himself an “accidental gambling tycoon”. In the early 1990s, he went to Cambodia to explore for oil in the Gulf of Siam but ended up with a casino licence that would eventually transform him into a billionaire casino tycoon.
Lip Keong launched his casino operations on a leased barge on the Bassac River in Phnom Penh in 1995. In 2000, NagaCorp bought land near the barge dock and began building NagaWorld, a casino-resort complex, which was opened in 2003. It has since become the largest casino-resort in IndoChina.
The group holds a casino licence running to 2065, with a guaranteed monopoly to 2035. For the first quarter of the year, the company posted gross gaming revenue of US$145 million (RM680 million), up 23.7% from a year ago. It posted earnings before interest, tax, depreciation and amortisation of US$80.3 million (RM376 million), up 33% year-on-year.
NagaCorp’s shares closed at HK$4.49 yesterday, valuing the group at HK$19.7 billion (RM11.83 billion).