Packer briefings kept from Crown shareholders
Crown Resorts’ largest shareholder, James Packer, was receiving almost daily updates from the organisation’s chief executive officer, with the information not disclosed to other shareholders.
The Age reports Crown Resorts chief executive Ken Barton failed to disclose the daily updated to Mr Parker when asked about them at last year’s annual general meeting.
Further revelations at the New South Wales public inquiry into Crown on Wednesday heard how the company mishandled the risk of money laundering at its casinos, which prompted Commissioner Patricia Bergin to describe the company’s lack of transparency as having “reached a debacle level”.
“How on earth a regulator would know what’s happening, this is what’s trouble me,” Commissioner Bergin said, who will report back to the Independent Liquor and Gaming Authority on whether Crown should keep the licence for its new Barangaroo casino.
The inquiry heard Crown’s largest shareholder, reclusive billionaire James Packer, demanded updated financial forecasts from Mr Barton in February 2019, three months before he agreed to sell 20 per cent of Crown to Hong Kong group Melco for $1.8 billion.
Mr Packer, who owned 46 per cent of the company at the time, responded to the 2019 full-year forecast by saying that Mr Barton and other executives had their “heads in the sand”, that he was “sick of never meeting the plans” and warmed them to “make sure, for your own sake, we achieve the financial year 2020 plan.”
The inquiry was played a recording of Crown’s October 2019 AGM, during which shareholder activist Stephen Mayne asked the group’s independent directors to explain what information Crown shared with Mr Packer, including if he was “selectively briefed” or receiving any “special treatment”.
Mr Barton, then Crown’s chief financial officer, answered on their behalf by explaining that Crown shared information with Mr Packer’s private company, Consolidated Press Holdings, in order to provide some services to the group under a long disclosed agreement.
However, he did not tell the meeting Mr Packer was not allowed to receive company information under the agreement, nor did he mention that a separate “controlling shareholder protocol” was put in place for sharing information with Mr Packer in 2018, after he resigned as a Crown and CPH director.
Counsel assisting the inquiry Adam Bell put to Mr Barton, who took over from John Alexander as chief executive in January, that he gave a “deliberately misleading response to the shareholders.”
Mr Barton rejected this, saying he wanted to give shareholders “context” of the broader relationship between Crown, Mr Packer and CPH.
“So couldn’t you just tell him in truth: I’m briefing Mr Packer on a daily basis?” Commissioner Bergin asked.
Mr Barton agreed that would have been “a more complete answer.”
“It would have been a true one, wouldn’t it?” an exasperated Commission asked.
“It would have been the trust answer, yes, Commissioner,” Mr Barton said.
Mr Packer is due to give evidence to the inquiry next week.
The inquiry is considering whether Crown is a suitable company to hold the licence for its new casino set to open at Sydney’s Barangaroo in December.
Crown admits advertisement claim error
A series of full-page newspaper ads by Crown Resorts misled investors, a New South Wales inquiry into Crown’s fitness to hold a casino licence in Sydney has heard.
The Sydney Morning Herald reported in September that Crown’s chief legal officer Joshua Preston conceded to the commission that the advertisement which claim its gambling partner Suncity was controlled by a regulated Hong Kong firm “were not part of that listed company.”
Mr Preston said Crown’s junket partnership was actually with Alvin Chau, who is the chairman of the listed company.
Mr Chau is blocked from entering Australia due to his suspected links to organised crime and money laundering.
The advertisements released by the Crown board on July 31, 2019, were in response to articles that pointed out Crown’s licensed junket operators had links to organised crime, drug and sex trafficking and money laundering.
Mr Preston said he and the board were made aware of errors in the statement in the days after the ASX announcement but they had not corrected it to his knowledge.
It is unlawful for a listed company or its officers to provide materially false or misleading information to the Australian Stock Exchange.
There is no suggestion the board intended for the statement to be misleading.
A Crown source close to the board said the casino group had been given inaccurate or misleading information by senior company managers prior to issuing the 2019 statement and that certain directors regretted the decision to release it and the advertisement in response to the news reports.
The statement was intended to reassure regulators, the public and politicians that the gambling giant had not negligently partnered with suspected crime bosses in Macau.
It was signed by Crown’s board of directors, which include former politician Helen Coonan, former AFL boss Andrew Demetriou and former advertising supremo Harold Mitchell.
Corporate records show high stakes gamblers recruited through the junket laid down more than $2.3 billion in Crown Resorts’ Melbourne and Perth casinos in three months during 2015.