Superannuation group calls for Crown directors to stand down
An advisory group is calling on Crown directors to consider resigning in the wake of damaging revelations about their independence and oversight at the casino giant.
The Age reports the Australian Council of Superannuation Investors, which advises funds overseeing $1.5 trillion of investments, is encouraging its members to vote against the Crown directors standing for re-election at its annual general meeting next week in protest over how the company has been run.
Three directors standing for re-election at the meeting, including key James Packer lieutenant Guy Jalland, who negotiated the sale of a 19.9 per cent stake for the billionaire to Hong Kong’s Melco Resorts in a since abandoned deal that put Crown’s Sydney casino licence at risk.
Two independent directors are also standing for re-election: Jane Halton and John Horvath.
The latter’s independence was questioned on Wednesday when it emerged he was Kerry Packer’s long-time personal physician and oversaw the magnate’s kidney transplant in 2000.
Crown’s corporate governance has been under fire in recent weeks following evidence at a NSW Independent Liquor and Gaming Authority probity inquiry about the casino group’s secret deal to pass on sensitive financial information to its largest shareholder James Packer.
The inquiry has also grilled independent directors including Harold Mitchell and Andrew Demetriou, who both had their independence from Mr Packer called into question.
“Investors will be looking for director accountability for their oversight of governance failures identified during the NSW casino inquiry,” ACSI chief executive Louise Davidson said.
“These include the board-approved private briefing of shareholders, oversight of anti-money laundering process and ‘ill-advised’ public response to concerns over Crown’s practices.”
Ms Davidson said the entire board of Crown must be held accountable.
“Beyond the three directors seeking re-election, what we have heard in the inquiry reflects poorly on the board as a whole. A number of long-serving directors should be considering their position in light of what has emerged,” she said.
Ms Davidson was particularly critical of the secret protocol signed by the board to pass on information to James Packer’s private investment vehicle Consolidated Press Holdings that was not shared with other directors.
“The confidential board-approved process of providing daily financial reporting to CPH is something we have not seen before in an ASX200 company and we hope that we never see it again.”
Advisory groups take a stance on director elections
Prominent advisory group Ownership Matters, which advises industry super funds as well as other institutional investors on governance, has also recommended Crown shareholders vote down the re-elections.
Two other advisory houses, ISS and CGI Glass Lewis, have recommended shareholders support the directors.
ACSI’s members own about seven per cent of the shares in Crown.
Australian fund manager Perpetual owns about nine per cent and has declined to comment while the inquiry is ongoing.
American private equity firm Blackstone, which owns almost 10 per cent and has recently applied for regulatory approval to increase its stake, declined to comment.
Professor John Horvath told the inquiry on Wednesday there had been failings in how Crown handled its junket partnerships, anti-money laundering regimes and in corporate governance.
He has been on the board as an independent director for 10 years and is also the chair of Crown Melbourne’s compliance committee, which is responsible for ensuring it meets its legal obligations with the Victorian gambling regulator.