Crown's high rollers desert casino giant on back of crime link

Crown Resorts’ high-roller turnover has plummeted in the wake of revelations the group worked with figures linked to organised crime to lure wealthy Chinese gamblers to its casinos.

There were signs of rising investor discontent with Crown at its annual general meeting on Thursday, with significant protest votes lodged against the re-election of high profile directors Harold Mitchell and Helen Coonan to its board.

Crown Resorts executive chairman John Alexander (left) and company secretary Mary Manos arrive at the company's AGM on Thursday. Credit: Joe Armao

Crown executive chairman John Alexander used the meeting to defend the $8.2 billion group’s corporate governance and described media reporting that has dogged the company in recent months as “sensationalist and unproven”.

"There are a number of interests and activists who continue to pursue an anti-Crown agenda," Mr Alexander said. "Crown has no interest in being used by those who seek to do the wrong thing."

When asked in the meeting about specific problems in the reports by The Age, The Sydney Morning Herald and 60 Minutes - including Crown’s relationship with a junket partner who owns a Melbourne brothel linked to organised crime and investigated for suspected human trafficking - Mr Alexander said "legal constraints" prevented him from commenting.

Crown is at the centre of several regulatory and law enforcement investigations sparked by the reports, including an inquiry by the NSW Independent Liquor and Gaming Authority.

There were significant protest votes at Crown's AGM on Thursday. Credit: Joe Armao

The Australian Commission for Law Enforcement Integrity will next week start unprecedented public hearings into how visas were issued to Chinese Crown patrons which it said raised "issues of corruption".

Crown revealed on Thursday that its VIP turnover fell 46 per cent from July 1 to October 21 compared to same period a year earlier, while non-VIP revenue increased 2 per cent.

"The VIP part of the business is.... by far the most volatile," said Crown's chief financial officer Ken Barton. "There are some macro-economic headwinds... but I think that this business is very hard to predict, very hard to measure over a short period of time."

Crown’s local rival Star Entertainment did not appear to have been affected by those same external headwinds, saying on Thursday that its high-roller turnover increased at Sydney, Brisbane and Gold Coast casinos in the first quarter of the year.

Almost 23 per cent of votes were cast against the re-election of Ms Coonan, a Howard government minister, as an independent director and 27 per cent were cast against the re-election of veteran advertising executive Harold Mitchell as an independent director.

Outside of the 37 per cent block of shares controlled by its biggest shareholder, reclusive billionaire James Packer, who backed the directors, that means 43 per cent of votes went against Mr Mitchell and 36 per cent went against Mr Coonan.

Meanwhile 17 per cent went against the company’s executive remuneration report, with 28 per cent against outside of Mr Packer’s holding. That means that without Mr Packer’s support, the company would have received a "strike" from a no-vote above 25 per cent, setting up a potential board spill.

It is not clear how Hong Kong casino group Melco Resorts voted with the 9.99 per cent stake in Crown it bought from Mr Packer in May.

Mr Mitchell is facing civil legal action launched by the Australian Securities and Investments Commission relating to his time on the board of Tennis Australia.

He told investors on Thursday that was no reason to step down from Crown's board, because he was "vigorously defending these claims" and expected to win.

Proxy advisory firms ISS and CGI Glass Lewis recommended against Ms Coonan's return because she chaired  Crown's audit committee and Crown had paid auditor, EY, excessive fees for other services threatening its independence.

Ms Coonan also defended her extensive commitments outside of Crown, which includes the chairmanship of HGL Limited, the Australian Financial Complaints Authority, the Minerals Council of Australia and a director of eight other corporate and not-for-profit groups.

"Not all roles require the same investment of time and attention as the Crown board," she said. "The important point is that I am able to, and do, devote sufficient time and attention to the requirements of Crown."

Former AFL boss Andrew Demetriou and John Poynton were re-elected to the Crown board with the support of 93 per cent and 91 per cent of shareholder votes.

Crown's shares closed 0.66 per cent higher at $12.25, while Star Entertainment's closed 5.4 per cent higher at $4.70.