Crown’s potential share sale to Melco draws attention
James Packer’s Consolidated Press Holdings sent confidential financial forecasts to a Hong Kong group that was in negotiations to purchase a stake of Crown Resorts, a NSW inquiry into the casino operators’ suitability to hold a licence in the state has heard.
The Brisbane Times reports that Mr Packer’s CPH sent financial forecasts to Hong Kong group Melco Resorts, as a 19,9 per cent stake in the Australian casino giant was being negotiated.
The New South Wales Independent Liquor and Gaming Authority into Crown last week heard that Mr Packer’s CPH explored the idea of selling some of his 46 per cent stake in Crown to the notorious casino junket operator Suncity, owned by Alvin Chau.
Crown director and CPH executive Michael Johnston told the probity inquiry that CPH sent a report to Melco during their sale negotiations in May last year, which revealed Crown’s financial forecasts.
Mr Packer had demanded the profit outlook from Crown’s chief financial officer Ken Barton earlier that month, and Mr Johnston had encouraged Mr Bartin to revise his draft forecasts higher, the inquiry heard.
Mr Johnston told the inquiry that while information CPH sent to Melco was “confidential”, he did not consider it to be “price sensitive” because the forecasts were broadly in line with the consensus of market analysts.
Counsel assisting the inquiry Adam Bell asked if Mr Johnston saw “even the potential conflict of interest in you suggesting positive amendments to financial forecasts whilst at the same time your company is involved in negotiations to sell its Crown Resorts shares?’
“Given that I was not inputting into the pricing discussions, no I didn’t,” Mr Johnston said.
“I was just commenting on this in the same way that I would comment on…any other budget process.”
Special protocol allows Packer access to financial data
Mr Barton, now Crown’s chief executive, told the inquiry this week he would have reconsidered sharing the information with CPH had he known about the negotiations with Melco.
He shared almost daily updates with Mr Packer under a “controlling shareholder protocol” that stipulated information could not be shared if it was improper to do or might benefit another party.
Melco’s investment in Crown was scuttled by the NSW probity inquiry, which is also investigating whether the sale agreement breached Crown’s Sydney casino licence.
The licence forbids any involvement in Crown by Macau casino kingpin Stanley Ho, Melco boss Lawrence Ho’s father, who died in May this year, and a list of related entities.
Mr Johnston told the inquiry he was not aware at the time CPH sold the shares to Melco that a Ho family trust forbidden by Crown was a significant shareholder in Melco.
That is despite that information being detailed in several corporates and legal documents in his possession, the inquiry heard.
Mr Johnston said that CPH was exploring several options for its Crown shares in early 2019, including offloading most of them and approaching Crown’s biggest junket tour partner SUncity as a possible buyer.
Suncity has been a focus of the probity inquiry due to the extensive warnings Crown has received about its ties to Asian organised crime gangs, which had led to its boss Alvin Chau being banned from visiting Australia.
The inquiry, which is considering whether Crown should keep the licence for its Sydney casino, will continue its public hearings this week, with Mr Packer, former chairman John Alexander and other Crown directors due to give evidence.