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Last Stalinist state welcomes casino entrepreneur

Stephen Vines
Monday 12 July 1999 00:02 BST
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NORTH KOREA, the world's last truly Stalinist state, has finally found an investor for its foreign investment zone. The only problem is that the investor's company is run by a Hong Kong-based businessman with a criminal record and all it wants to do is to set up North Korea's first casino and first foreign-owned hotel - not the factories which were originally envisaged.

Intensive efforts to lure other investors to the country have drawn a total blank. The cash-strapped government in Pyongyang is therefore having to settle for what it has got.

The target date for establishing the casino and hotel is the end of this month. It will be located in the Rajin-Sonbong economic and trade zone, wedged in the north-east corner of the country, near its borders with China and Russia.

The Hong Kong investor is called the Emperor Group, founded by Albert Yeung.

Mr Yeung is currently banned from holding the directorship of a listed company after being found guilty of insider trading.

He was previously convicted of attempting to pervert the course of justice. He was up on a similar charge four years ago, but walked free after all the witnesses in the case mysteriously lost their memories.

Mr Yeung founded a number of large companies in Hong Kong, some of which are in the property sector, others in retailing and the finance industry. His company also controls one of the local newspapers.

Despite the Emperor Group's controversial history, Mr Yeung has proved adept at working with high-level political contacts.

In 1994, Bob Hawke, a former prime minister of Australia, joined the Emperor board. Rita Fan, the president of Hong Kong's legislature, served as a company adviser and relations with the Chinese leadership were sufficiently good to have secured a meeting between Mr Yeung and China's President, Jiang Zemin.

In North Korea the political connections seem also to have been good. The company claims that blessing for the project comes from the top, meaning Kim Jong-Il, son of the late dictator, Kim Il-Sung.

Emperor sees its stake in the country as a long-term investment, designed to draw in gamblers from China, Japan, the West and South-east Asia. How they will get to this remote location or, indeed, obtain entry visas to tightly controlled North Korea, remains a problem.

It seems certain that there will not be many gamblers from the country itself.

A significant part of the population is living at starvation levels. Spare cash is unlikely to find its way to a casino.

Indeed, the Emperor Group's new Seaview Casino Hotel will set new standards for austere North Korea, promising luxuries such as saunas and tennis courts, alongside the gambling tables.

All other hotels in Korea are state-run and not exactly designed for comfort - although they appear to be extremely well-equipped for keeping a close eye on their guests.

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