Wed, Jan 22, 1:28pm by William Brown
The first of three inquiries into Crown Resorts and the conduct of its casino business kicked off on Tuesday in Sydney, where the former supreme court judge Patricia Bergin outlined how she intends to tackle the task.
The Guardian reports that witnesses are likely to be called at a later date, when the New South Wales inquiry – set up at arm’s length to the New South Wales Independent Liquor and Gaming Authority – begins in earnest.
Two other inquiries – by the Victorian casino authorities and the public hearings to be held by federal Australian Commission for Law Enforcement Integrity, appear to be on hold for the time being, awaiting the results of investigations.
At the same time, Crown is fighting efforts by shareholders, who are suing it in a class action to take witness statements from company employees convicted in China for illegally promoting gambling.
The New South Wales inquiry is expected to focus on the proposed $1.75 billion sale of 20 per cent of Crown to Lawrence Ho’s Melco Resorts, and whether this sale gives rise to any issues about probity of close associates or breaches of a specific clause in Crown’s licence for the Barangaroo casino, which prevents Ho’s father, Stanley Ho, and a list of specified companies being associates of Crown.
The clause was inserted into the licence when it was granted in 2014 after an adverse finding by New Jersey authorities about Stanley Ho and possible alleged connections with triads in Macau and China.
Inquiry into Crown Resorts sale begins in NSW
SYDNEY: An inquiry begins today into James Packer's sale of his stake in Crown Resorts to … pic.twitter.com/nfmv493NLP
— 9AM GM Daily News (@9AM_GM_News) January 20, 2020
Bergin’s inquiry will need to delve into the complex structures of Lawrence Ho’s and Stanley Ho’s casino empires in Macau and their financing to determine the answer to this question.
Revelations soon after the deal was announced that Lawrence Ho was a director of one of the banned companies, Lanceford, raised immediate questions.
As a result, Lawrence Ho, who had initially bought 10 per cent, announced he would pause on the second 10 per cent purchase.
In another hurdle for Melco, another company on the banned list, Great Respect, which is closely linked to Stanley Ho, remains the owner of more than 20 per cent of Melco.
The New South Wales casino legislation also includes broad requirements that close associates of a company, which holds a casino licence must be of good repute and not have a business association with persons who are not of good repute.
While Lawrence Ho has passed scrutiny in the past when Melco and Crown had a joint venture in Macau together, it is likely he will need to clear this hurdle again to become a significant shareholder in the Australian licence.
The New South Wales inquiry is also looking at a number of issues raised by 60 Minutes and Nine that allegedly go to the probity of Crown itself.
These included allegations of money laundering in Crown’s high roller rooms in its casino in Melbourne, failures to report cash transaction and dealing with junket operators with links to drug traffickers, money launderers, human traffickers and organised crime.
Judge Bergin’s terms of reference specifically refer to the allegations as raising questions of suitability.
But as they occurred in Melbourne and do not go to conduct involving the New South Wales licence with Barangaroo not yet open, there may be questions about jurisdiction and whether Bergin wants to be at the forefront on these issues.
For its part, the Victorian Commission for Gambling and Liquor Regulation has put a “re-examination” of Crown’s licence on hold while it waits for the outcome of a federal investigation that has also shown little signs of progress.
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