Independent inquiry needed into Crown to test its casino licence suitability
Counsel assisting the inquiry into Crown Resorts’ suitability to hold a casino licence in NSW have told of the need for a detailed independent report into the organisation before it can be considered a suitable party to hold a casino licence in New South Wales.
In closing submissions, counsel assisting Naomi Sharp, SC, said on Monday there was evidence Crown had a culture that was “dysfunctional”, showed an “arrogant indifference to regulatory and compliance risk” and had “prioritised the pursuit of profit above all else.”
She said the company also had shown its “culture of denial and unwillingness to address past failings.”
Counsel assisting the inquiry are arguing that Crown is not suitable to hold a casino licence in New South Wales, according to The Australian.
It comes as the coming is still planning to open its new $2.2 billion casino on December 14, despite the fact the inquiry is not due to complete its report until February 1.
In her closing submission, Ms Sharp said the inquiry had shown that Crown had “fundamental problems” in terms of risk management, governance and culture that shaped the way the company set about achieving its objectives.
She said Crown had not conducted any “comprehensive review or root cause analysis” to ascertain the reasons for the failures that had been identified by the inquiry.
“Without that, we submit there can be no confidence that the causes of the failures that have been identified have been addressed,” she said.
Counsel assisting outlines problems Crown has faced
Ms Sharp said problems had included the events that led to the arrest of staff in China, ongoing suspicious transactions that could amount to money laundering, its relationship with junket operators that were run by people of questionable repute, and the sale of a shareholder in the company to Macau casino operator Melco that gave rise to a breach of Crown’s regulatory agreement in NSW.
She said Crown’s management of its relationship with its controlling shareholder, James Packer, has had a “deleterious effect on Crown Resorts’ corporate governance structures.”
She said the Crown board had failed to show “active stewardship” and to challenge management where necessary.
Ms Sharp said measures proposed by Crown to the inquiry to improve its practices and corporate governance “remained inadequate” as its problems were a result of fundamental problems of its risk management, governance and culture.
She said an independent inquiry by an external expert approved by the ILGA was needed that covered areas of governance and risk management, the independence of directors, the management of its relationship with its major shareholder, reporting lines within the company, its due diligence in dealing with third parties and other issues of culture, values and financial incentives and bonuses.
She said the independent inquiry should also review the issue of Crown’s future engagement with the casino regulator in NSW and other law enforcement agencies.
The review should include a “detailed retrospective into the circumstances that gave rise to the arrest of employees in China (in 2016), the role of particular individuals and how reporting lines within Crown became so significantly compromised.”
Crown needed to develop a plan in conjunction with the independent expert to remediate its internal problems with specific outcomes and milestone dates for their achievement as well as plans for the reporting of any future shortcomings in compliance to regulators, Ms Sharp said.
It was deemed by Ms Sharp that Crown would not be considered suitable to hold a casino licence in NSW until the review had occurred, its board had accepted its findings and implemented a detailed remediation plan.
“Until such review and remediation have demonstrably occurred to the satisfaction of the authority, it will not be possible to find that either the licensee or Crown Resorts are suitable in the sense required by the NSW Casino Control Act,” Ms Sharp said.