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ECLIPSE OF THE SOL KING(Evening Standard Via Thomson Dialog NewsEdge) Butch Kerzner used to go jogging in the Bahamas with his friend Robert Carron, chief operating officer of the Tribune Media Group. Carron remembers once, when they were struggling to finish a mile, Kerzner, the chief executive of one of the world's largest casino empires, decided they needed to train for a marathon. A while later, they were running together in Singita resort in South Africa. Carron was worried because the park was full of lions. 'Butch said, "It's not dangerous unless you fall behind."' Butch Kerzner, 42 when he died in a helicopter crash in the Dominican Republic two weeks ago, was one of life's golden boys. Funny, handsome, driven but twinkly-eyed, he was the popular head of Kerzner International, founded by his much-married father Solomon (Sol) Kerzner, the casino impresario who makes up in chutzpah and wives for what he lacks in height. And just as the wings of a butterfly fluttering in China can cause an earthquake halfway across the globe, according to chaos theory, so this helicopter crash in the Caribbean has repercussions in the unglamorous, windswept wharves of Greenwich. Kerzner International, along with the American tycoon Philip Anschutz (once described by Forbes magazine as 'America's greediest executive') is the preferred bidder for the new supercasino licence at the Millennium Dome in Greenwich, with its promise of million-pound-jackpot one-armed bandits to lure in the punters. Sol Kerzner has had his eye on the prize for some time. Back in 2002, when the government was first toying with the idea of changing our gambling laws, he told reporters: 'I am interested and serious about trying to enter the UK gaming market.' He duly set up in Knightsbridge, hired political lobbyists Citigate Public Affairs, and started buying into various established teams: insiders say that a supercasino, which costs at least GBP200 million to build, is beyond the budget of most British casino companies. In 2003, the Kerzners reportedly paid GBP1.25 million for a licence to open a casino in Northampton. Kerzner also put GBP10 million into London Clubs International, the then ailing British casino chain, and last year, Kerzner International bought Wembley, the gaming company that once owned Wembley Stadium. He has said he wants to spend GBP600 million on developing casinos in London, Glasgow and Manchester, even enlisting the support of Mick Hucknall of Simply Red. Kerzner's plans have been thwarted by the government's sudden decision to build only one pilot supercasino (the original plan was for eight). It was the lure of the Dome that led to the meetings between Tessa Jowell, Secretary of State for Culture, Anschutz and Richard Caborn, Minister for Sport and Gambling, which the government attempted to cover up but was finally forced to admit. There was also a private dinner, hosted by Matthew Freud, at which Jowell and Anschutz were seen talking to each other; and then, of course, John Prescott's now notorious trip to Anschutz's ranch. Although Sol Kerzner was still very much a player in the company, it was Butch who was running the show, making sure his father's dreams were implemented. But now the crown prince is dead, and there is no obvious contender to take his place. 'He was the blue-eyed boy of our generation. He was such a nice guy. Sol was grooming him to take over the business,' says an old friend and contemporary from South Africa, who grew up with Butch amid the hedonistic luxuries of the last generation of white merchant princes, as lions both political and actual prowled the perimeters of their gilded compounds. 'Sol is broken-hearted. God knows what he is going to do now.' Everybody who knew him speaks of a kind, funny, self-effacing man. 'Butch was very different from his father. Sol's like Donald Trump, but Butch didn't like the limelight; he was much more humble,' says an old friend. 'He never traded on his name. You'd never see him photographed at a party.' Butch, born Howard Brett in 1964, was Sol's son by his first wife, Maureen. She was succeeded by Sheila (who committed suicide shortly after the birth of their second child), Anneline Kriel, an ex-Miss World, the supermodel Christina Estrada, to whom Sol was engaged for a decade, and his current wife, Ms Estrada's ex-best friend Heather, who left her preppy New York banker husband for the pintsized tycoon. Sol had five children: Butch, Andrea, and Beverley with Maureen; and Brandon and Chantelle by Sheila. Butch didn't inherit his father's roving eye. He was happily married to Vanessa Kong, a Hong Kong Chinese girl he fell in love with when they were both doing MBAs at Stanford University in America. Their children - a boy, Tai, and a girl, Kaylin - are five and eight respectively. But Butch Kerzner's death has repercussions beyond the devastation of his family. His brains and instinct were an integral part of Kerzner International. 'Butch had the most amazing acumen as a businessman. He had his father's vision, but he was less ruthless, more selfeffacing,' says a prominent member of the South African business community who grew up with Butch. 'Very few people have the instinct and the ability to succeed in that world, but Butch had it.' It was Butch who had expanded the business into the Bahamas, with the 2,317-room Atlantis, an 'ocean-themed' casino and hotel complex on Paradise Island (Michael Jackson sang at the opening). His plan for a 1,500-room Atlantis casino in Dubai was said to be costing $650 million and covering 120 acres on an artificial island shaped like a palm tree. He had recently put in a bid to build another Atlantis in Singapore. 'He was a great visionary,' says Donald Trump, himself a big noise in the casino and hotel world. 'He was one of the few sons who was able to stand up, in terms of talent, to a great father and you don't see that much in my business.' On 11 October, when Butch was flying back to Puerto Plata International airport in the Dominican Republic, after a trip to the Rio San Juan township in Playa Grande, scouting out possible casino sites, the helicopter he was flying in crashed. All four people on board were killed: Butch; a Cuban-American colleague, Delio Luis Gonzalez; and the two Dominican military officers flying the helicopter - the pilot, Kevelier Matos, and David Rosario Pimentel, the co-pilot. The Dominican Civil Aeronautics Board (DGAC) rushed investigators to the crash site. According to their preliminary-investigation, the Colibri helicopter, owned by a company called Helidosa, broke up in midair. 'Witnesses confirm that the apparatus, after losing some of its parts mid-flight, started turning uncontrollably until it crashed,' said the DGAC spokesman Angel de la Rosa. The next day Sol and Butch's widow Vanessa flew in to retrieve his body. The local paper, Dominican Today, described the party as 'crying incessantly'. On Friday 13 October, two days after his death, in accordance with Jewish tradition, Butch was buried in New York at a quiet family service. Paul O'Neil, former CEO of the company's Paradise Island business, has been appointed acting CEO, but the timing couldn't have been worse. So confident were the Kerzners of their empire's future that in August they had just bought the company back into private hands, paying $3.6 billion. But now the long future stretches into a mist. 'This is a family business but there simply isn't anybody else to take over,' says the South African businessman. 'Butch's brothers and sisters just haven't got what he had. And Sol had been training Butch for this his whole life.' Sol was happy to tell the story of how he tried out his second son, Brandon, in the business for a year, but it didn't work out. 'I called him into the office one day, and said, "Brandie, this isn't the business for you," ' Sol would explain, to prove that Butch got his job on merit as well as genes. Of Butch, Kerzner said: 'He's a great entrepreneur because he can smell when a deal is right and when to say no.' He brought up his talented son with all the money and gloss that he himself had lacked. Sol Kerzner grew up on the wrong side of the tracks. His parents were Lithuanian Jews who'd fled the country penniless during the Second World War and made their way to South Africa, where they ran a seedy hotel in Durban. There's a story that Sol got his first break when an angry creditor turned up there. 'What are your plans to pay your bill,' asked the man, a middle-aged accountant. 'F*** all,' Sol replied. The accountant was apparently so impressed by the youth, he backed him. Sol has retained his fondness for the F-word in his business dealings ever since. He apparently opens all business meetings with the phrase 'What the f***'s going on?' He virtually invented 'destination' resort gambling with Sun City, a five-star casino and hotel complex, which he opened in the former African homeland of Bophuthatswana in 1979. To this fantasy ruined jungle city, a few hours' drive from Johannesburg, he lured stars such as Frank Sinatra and Liza Minnelli to entertain the punters in the louche last decade of apartheid. With his motto 'Number one core value - blow the customer away', he became South Africa's best known and probably most successful entrepreneur, and is probably the only businessman to inspire a protest song, on the antiapartheid album Sun City, which came out in 1985 and featured songs - one with the lyric 'I ain't gonna play Sun City' - by artists including Peter Gabriel and Bono. Sol's buccaneering business style and fast turnover of wives inspired an unauthorised biography, Kerzner Unauthorised, by one of South Africa's leading business journalists, Allan Greenblo, which Sol managed to injunct in 1997. Greenblo is now not even allowed to discuss Kerzner with journalists without risking prison for contempt of court. No one will say how Kerzner got his exclusive gambling rights for Sun City in Bophuthatswana. Some time after the deal was signed, Lucas Mangope, the then president of Bop, as it's known, left the country and thereafter lived in some splendour in Switzerland; he was estimated to have taken about GBP2 million with him. In 1989, Kerzner was accused of bribing George Matanzima, the prime minister of the Wild Coast tribal homeland of Transkei, GBP500,000 for exclusive gaming rights in the region, for his Wild Coast Sun casino. Kerzner admitted the payment, but claimed the money had been extorted from him. Matanzima went to prison for nine years. Christo Nel, the attorney general of Transkei, compiled a 300-page dossier on Kerzner and said: 'I have an arrest warrant charging him with bribery, corruption, fraud and perjury. I'm not going to give up now, or ever; not until Sol Kerzner is brought to justice.' But Kerzner managed to evade Nel's eight-year pursuit, selling up in South Africa and moving his business to the States. Those who know the South African business world say it was difficult to make money in those days without bending the rules. 'The place was just terribly corrupt,' says one Western business analyst. Butch, in contrast, was educated at King David's School in Johannesburg, the first choice for South Africa's Jewish elite. He went to university in California, and then did an MBA at Stanford, where he met his wife. While Sol worked behind his father's bar, and learned to box at school to fight off the bullies, Butch cut his teeth in mergers and acquisitions at the merchant bank Lazard Freres and also First Boston. He joined Kerzner International in 1992, when it was known as Sun International. It was under his leadership that Kerzner International (it was renamed in 2002) started disentangling itself from South Africa and spreading its wings. Sun City was sold in 1989. Although the family still have a house in Cape Town - where legendary parties are thrown that keep the white oligarchy provided with hedonistic gossip for months - their homes and business interests are abroad. 'It is noticeable that when Butch was running things, Kerzner no longer got monopolies, but then Sol was good at securing monopolies,' the South African businessman carries on. 'Butch played things by the book, but he was so good, it didn't matter.' Ironically, it could be that Kerzner and Anschutz have backed the wrong card. Despite coming top of the Casino Advisory Panel's table a few months ago, beating other contenders such as Blackpool, Glasgow and, not surprisingly, Ipswich, insiders in the business now think it is extremely unlikely that the Dome will win the first licence, thanks to all the bad press about John Prescott and his hospitality. 'Look at it politically,' suggests a political lobbyist who has worked on the casino issue for several years. 'Tessa Jowell has to stand up in parliament and announce we have decided to award the licence to the Dome in Greenwich. Whatever the Casino Advisory Panel's point system says, it would all be claimed that it was because of Prescott and his links. It would sully the entire process for years. If I were part of the Blackpool bid, I would be pretty happy now.' Of course, the Casino Advisory Panel's recommendations are just that - they are not final. The decision is down to the government. Insiders say what they think will happen is that, when the Casino Advisory Board produces its final recommendations later this year, it might miraculously turn out that Blackpool or Glasgow have overtaken Greenwich. Of course, Kerzner and co have fingers in other gaming pies in the UK, but those in the business say that Kerzner International really only seems interested in the supercasinos. They build on a grand scale, and the smaller ones aren't big enough for them. The years while the pilot casino was under review would give Kerzner International time to regroup. For the moment, Kerzner International has gone to ground. Industry analysts think it will be a while before it surfaces again. 'They've got to work out what to do next. Butch's death has probably wiped half a billion off the value of the company,' said one leisure industry analyst. In the past, personal tragedy spurred Kerzner on to greater business success. He once described how the suicide of his second wife, Shirley, was 'obviously a huge setback in my life. Probably the greatest I have ever experienced. The first week I was in a pretty poor condition. In keeping with the Jewish tradition, I mourned at home for seven days, and was then due to say my prayers in the synagogue. I remember walking there and thinking of my ten-month-old daughter and three-year-old son our my family. I think that's the thing that kept me sane. I knew I had to pull myself together. We were very much in love. Shortly after that I threw myself into the planning of Sun City. I drove the consultants crazy. That's why I needed to be occupied with business.' But that was 30 years ago and Sol Kerzner was a lot younger then. He's in his seventies now, and he's known not to be well. He always had a reputation as a heavy drinker; he had a heart attack in 1989 but, despite warnings, cutting down on the Scotch and replacing his 60a-day cigarette habit with worry beads (gold, of course, and with a spare string in case they snap), he still has a reputation for hard living. But now he has not only lost his son, he's also had the future of his company snatched away. He must wonder what on earth it's all been for. An old family friend is not sanguine about the future: 'I wouldn't be at all surprised if Sol decided to sell up everything.' Copyright 2006 Evening Standard. Source: Financial Times Information Limited - Europe Intelligence Wire. |