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 reports 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.
Mr Preston told the inquiry that Crown is still working with Zhou Qiyun, who operated the Chinatown junket at Crown.
Mr Preston said he was “surprised” to learn about Crown’s ongoing relationship with Chinatown agents, but insisted it was not accurate to say Crown was still dealing with Chinatown itself.
“It’s a very different relationship from a junket representative to a junket operator,” he said.
Mr Preston said Crown also continued to work with a junket associated with the Neptune Group, which was also named in media reports as having Triad links.
The NSW inquiry has raised questions about Crown’s due diligence in partnering with Suncity.
In the board’s ASX statement and advertisement, Crown’s directors defended the firm’s dealings with Suncity and claimed its money laundering controls were rigorous and adequate.
The inquiry heard in August that Crown did not consider ending the partnership with Suncity, even after it discovered $5.6 million in cash stored in cupboard in the junket operator’s private gaming parlour at Crown Melbourne, in an incident the casino’s chief legal officer said sent “money laundering alarms ringing.”
The inquiry has also heard Crown received a due diligence report on Mr Chau in April 2016 that warned the US government considered him to be involved in organised crime, while a separate May 2016 dossier warned that he appeared to be a former member of the “14K Triad” in Macau, under the leadership of notorious gangster Wan Kuok-koi.
The inquiry will continue this week.