News Home » Top Stories » Stanley Ho's escape to Macao in World War II laid the foundation for his fortune. But it wasn't without controversy

Around the World

Stanley Ho's escape to Macao in World War II laid the foundation for his fortune. But it wasn't without controversy

Remembering the life of Stanley Ho, Macao's 'godfather of gambling'

(CNN)When Stanley Ho Hung-sun, the man who made Macao a global gambling mecca, died at age 98 this week he was reportedly worth $14.9 billion.

But before Ho made Macao, he had to make himself.

Born in 1921, Ho hit hard times young when his father fled to Saigon, after his business collapsed in the late 1920s, leaving that side of the family penniless. Not long after, World War II broke out.

After the attack on Pearl Harbor on December 7, 1941, Britain and America declared war on Japan. The Japanese army invaded the British colony of Hong Kong where, despite fierce resistance, the city fell on Christmas Day.

Ho, who had worked as an air-raid warden, threw away his uniform for fear of being executed as Hong Kong came under Japanese domination, he recalled in Jill McGivering's book, "Macao Remembers."

Sir Robert Hotung, second right, with his family in front of their Hong Kong home.

But unlike the thousands who died from starvation, in battle or at the hands of the Japanese, Ho had options.

His great uncle was Sir Robert Hotung, the rich Eurasian comprador, who was the first Chinese man to live on Hong Kong's Peak, a wealthy district where only Westerners had been allowed to reside.

By the 1940s, Sir Robert was living in Macao, and invited Ho, then 20 years old, to join him in the Portuguese colony where a wealth of opportunity awaited.

In the 1990s, Ho told historian Philip Snow, who wrote a book about the fall of Hong Kong and the Japanese occupation: "I made a lot of money out of the war."

Here's how he did it.

Macao: City of Peace

By the early 1940s, with most of China under Japanese control, Macao found itself in a unique position in the Asian theater.

Portugal remained neutral in the war, until 1944, and as such, Macao was also deemed neutral territory. The colony was administered by the Portuguese Gov. Gabriel Maurício Teixeira, and the enigmatic Dr. Pedro José Lobo, known simply as Dr. Lobo.

Japan, however, controlled the seas and ports around Macao. That meant Macao had to cooperate with the Japanese in order to allow food and supplies to enter the colony. For Teixeira and Lobo, it was a delicate balance between preserving the territory's neutral integrity and avoiding overtly collaborating with the Japanese.

Wartime conditions were tough in Macao. Food supplies were short, inflation rampant and the colony had to deal with a growing number of Chinese and European refugees. Smuggling and the black market flourished.

Japanese troops parade through defeated Hong Kong in 1941.

To solve this problem Lobo created the Macao Co-operative Company (CCM), and Lobo asked Sir Robert Hotung if there was someone he could trust to work as the company Secretary.

Sir Robert recommended Ho.

The CCM was arguably the most important institution in Macao during the war -- the organization that kept the colony fed. Its main role was to keep Macao both economically alive, able to feed itself, and balance the delicate relationship with the Japanese.

It was one-third owned by Lobo, one-third owned by of Macao's wealthiest Portuguese families, and the final third was owned by the Japanese Army.

Ho knew the setup when he joined.

In an interview with Simon Holberton of the Financial Times over half a century later, Ho said: "I was in charge of a barter system, helping the Macao government to exchange machinery and equipment with the Japanese, in exchange for rice, sugar, beans.

"I was a semi-government official then. I was the middleman."

The kerosene king

As Secretary of CMM, Ho was authorized by Lobo to keep Macao fed by bartering anything the island had to offer.

This was no office job. Ho had to regularly travel by boat with the payments to receive the goods and get them back to Macao. His job involved playing off the Portuguese authorities, the Japanese military, triads gangs, and the various factions of China.

In his memoirs, Ho recalled that his first and most urgent task was to learn Portuguese and Japanese because his job was to barter between the two.

There is an element of daring to Ho's life in wartime Macao. Sailing rice, vegetables, beans, flour, sugar and other supplies between French Indo-China and Macao, along the southern Chinese coast and around Hainan Island, meant avoiding pirate gangs who would take your gold on the outbound voyage and your supplies on the inbound.

The Macao coastline in 1941.

Nationalist Chinese or Communist guerrillas were equally keen to secure the supplies or cash for themselves, and many saw the CCM's activities as collaboration with the enemy.

Japanese naval vessels were known to take potshots at all manner of civilian craft while, later in the war, according to historian Geoffrey Gunn, American and British submarines were liable to sink any vessel they thought were dealing with the Japanese.

Around this time, Ho opened a kerosene factory when public fuel supplies were running low, according to Joe Studwell, who conducted many interviews with Ho family associates for his book "Asian Godfathers."

Towards the end of the war, America -- concerned that Japan would completely take over Macao and use it as a base to defend southern China and Hong Kong -- bombed Macao's gasoline terminal in early 1945 to deny the supply to the Japanese navy and air force.

The attack, wiping out Macao's only other source of kerosene, inadvertently made Ho both essential to the continued functioning of Macao and extremely rich.

Controversy

After the war, Ho faced criticism that he had collaborated with the Japanese.

But Macao's wartime neutrality was always subject to Japanese influence -- especially after the fall of Hong Kong. And in 1943, when Tokyo demanded the installation of Japanese advisers to oversee Macao, a virtual Japanese protectorate was created on the island. Contact was unavoidable. Ho claimed he gave Colonel Sawa, head of the Japanese military secret police in Macao, English lessons.

China's Nationalist government, however, which had vociferously fought Tokyo since 1937, considered Ho and CMM's business transactions treacherous and supportive of Japan's war on China.

Stanley Ho had amassed a fortune by the end of World War II. This image is from 1971.

Chinese officials attempted to arrest Ho for collaboration but, according to his own account of the attempt, the Portuguese colonial police protected him. By late 1945, Ho was too entrenched, too important to Macao's economy for the Portuguese administration to hand him over to China.

In his defense, Ho wrote that when he asked why he should work with the Japanese given their treatment of the Chinese, and claimed he was told that "it was an order of the Portuguese government" and that "without food the Macao people will starve."

After the war

By the end of World War II in 1945, Stanley Ho had gained four vital things -- firstly, he cemented a lifelong relationship with Lobo, Macao's great unofficial boss.

Then, in 1942, he married the daughter of a wealthy Portuguese family, affording him protection and social position. Thirdly, he amassed a fortune and was a millionaire by his 24th birthday. Fourth, he established businesses in rice trading, kerosene and construction.

Within weeks of the Japanese surrender in August 1945, Ho was back in Hong Kong making strategic investments, such as buying a boat to start the first post-war ferry service between the two colonies.

He had cash, position, family, and good friends in useful positions.

He was all set to remake Macao and invest massively in post-war Hong Kong. In his memoir of the period Ho wrote: "Macao was paradise during the war."

Ho had, as they say, a very good war.