JUST 18 MONTHS ago, Sheldon Adelson looked like a broken man. I watched from a distance as the then 75-year-old owner of global gambling empire Las Vegas Sands had to be helped by bodyguards into a limousine in the driveway of a local hotel. Adelson, who in late 2007 was the second-richest person in the world behind Bill Gates but ahead of Warren Buffett, had by December 2008 lost even his billionaire status. The stock of his flagship Las Vegas Sands Corp was by then down 99%, giving it a market capitalisation of under US$1.8 billion and Adelson, its then 51% owner, a net worth of no more than US$900 million.

Indeed, Adelson’s empire was flirting with bankruptcy as banks called up loans, credit rating agencies downgraded its credit status to “junk” and several well-known US investment banks pulled away from underwriting a rights issue to recapitalise the firm as it dug its way out of the huge hole in which it found itself.

At the time, Singapore’s Marina Bay Sands was still more than a year from completion and I remember talking on the phone with an analyst in the US who asked me if I thought it would ever open. The situation was so dire Adelson openly criticised his top executives, including then chief operating officer and de facto No 2, William Weidner, for putting the company in that position. Analysts noted in their reports how Adelson’s shaky voice during an investor’s road show hardly instilled any confidence in the troubled company.

 

What a difference a year makes. Las Vegas Sands’ stock is up 26-fold from its lows 18 months ago. His billionaire status long restored, Adelson may still be way behind Gates and Buffett, but has quietly inched into the list of the 20 richest people in the world.

 

To be sure, it has been an arduous climb back from the brink. How did he pull off his Houdini act? Just days before Christmas 2008, Las Vegas Sands pushed through a highly dilutive rights issue in a transaction that also converted some of Adelson’s bonds into more Sands shares. With the new cash, Sands was able to pay down some of its debts. Last year, it raised more money through bonds for its Macau operations and then listed its former Portuguese enclave- based subsidiary, Sands China, on the Hong Kong bourse. The reprieve also allowed Las Vegas Sands to complete its Singapore casino and resort, albeit two months behind Genting Singapore’s Resorts World at Sentosa. Three months ago, Marina Bay Sands was partially opened. If you have strolled through the complex, you would probably know that it is still a work in progress. The entire project won’t be complete for six months at least.

 

But even as Adelson and Sands have clawed their way back over the past few years, they have paid a huge price. Early last year, Weidner and several other top Las Vegas Sands executives abruptly left. Although there were conflicting reports on the reason — whether they were asked to leave, or jumped ship just before they were pushed out — they, as professional managers, clearly left because they did not see eye to eye with the ageing founder. Las Vegas Sands is still a family firm run by the founding patriarch who brooks no dissent and has little time for Harvard Business School types who want to drive his firm the way modern, publicly listed firms are run.

 

Of course, investors and analysts knew all about Adelson’s reputation when Sands China was seeking a listing in Hong Kong last year. How will he run Sands China? Will he give the professionals a free hand? Some of the analysts I have spoken to in Hong Kong say Adelson laid on the charm when he wooed investors in the lead-up to Sands China’s listing. He assured the doubting Thomases that it would be independent. And of course, it would have an independent board. Indeed, he reportedly said that as a global gaming tycoon with properties and projects around the world, he was too busy to be micromanaging Sands China, or any of his other companies.

 

Last week, though, the Sands China board fired its president and CEO Steve Jacobs without specifying any reason. The firm’s Hong Kong-listed shares plunged 4.5% at one point in the initial hours after the news broke, though they recovered a bit later. Michael Leven, a special adviser to the board and Adelson’s newest right-hand man, has been appointed acting CEO — although analysts say they’ve been told he won’t be relocating to Asia any time soon.

 

“During the IPO process, it was understood that Sands China will be run without significant influence from the management team of its parent company,” writes Citigroup’s Macau gaming analyst Anil Daswani. “Without a legitimate reason for the termination, this could be seen as a result of undue influence by LVS management and could deal a huge blow to the company’s independent image.”

 

Daswani notes that Jacobs was “well respected by investors as he was viewed as a straight shooter”. He was also “instrumental in cost cutting that has led to record earnings of the company”, Daswani says. On July 28, Las Vegas Sands reported that the April- June period was a blowout quarter, helped by the newly opened Marina Bay casino as well as Macau.

 

As Las Vegas Sands prepares to open the last few phases of its Macau resorts late next year, Adelson, who is now its chairman and CEO, should be more focused on the legacy he leaves behind — and micromanagement of projects around the world might not be what he’d like to be remembered for. Indeed, the latest moves at Las Vegas Sands should serve as a reminder for ageing first-generation tycoons all over Asia. The greatest legacy a corporate builder can leave behind is putting in place a professional management team that can move the company forward.