Crown boss Rob Rankin facing possible referral to regulator after not fronting inquiry
The former chairman of Crown may be referred to ASIC after an inquiry heard it was “open” to conclude he failed to protect scared workers in China and didn’t divulge a threat made by James Packer.
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Crown’s former chairman may be formally investigated over allegations he failed to divulge a “threat” made by James Packer and failed to put Crown on alert about fearful staff in China before they were arrested, an inquiry has heard.
The Independent Liquor and Gaming Authority is considering referring Crown’s former chairman Robert Rankin to the corporate regulator after he refused to return from Europe to answer their questions.
Mr Packer, in his own evidence last week, told the inquiry he sent a “shameful” email to someone only known as Mr X and admitted to making verbal threats while looking into a potential privatisation of Crown in 2015.
The inquiry has also heard Crown staff in China, in that year, were living in fear of being “tapped on the shoulder” by authorities as they allegedly promoted gambling to VIPs in contravention of local laws from an unmarked office building in Guangzhou.
Counsel Assisting the inquiry, Scott Aspinall, said on Wednesday Mr Rankin appeared to be aware of both events and had questions to answer.
The inquiry wants to know whether Mr Rankin knew of the risks of arrest in China, why he told executives they should be on “high alert” about authorities, the steps he took to follow up his warning and whether he failed to tell members of the board.
The inquiry also wants to probe his discussions with Mr Packer about the 2015 email threat.
But, Mr Aspinall said, Mr Rankin is in the UK and has declined to face the inquiry or give evidence remotely. COVID-19 issues prevent him being formally served with a summons.
“In the absence of such explanations it is open to find firstly Mr Rankin failed without justifiable reason to notify his colleagues on the Crown board of his concerns for the staff in China,” Mr Aspinall said.
“Secondly Mr Rankin failed, without justifiable reason, to follow up his notification to place the company on high alert and failed to enable the Crown board to implement appropriate mechanisms to protect the staff in China from the risk of arrest.”
“And thirdly Mr Rankin failed, without justifiable reason, to notify his colleagues on the Crown board of the serious threats made by Mr Packer in November 2015.”
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The inquiry Commissioner Patricia Bergin SC may refer Mr Rankin to ASIC for “possible breaches” of the Corporations act.
The inquiry heard that Mr Rankin, through his lawyers, contends he has “an entitlement as a matter of natural justice to respond to adverse comment about him or in respect of his role as chairman”.
The statement came after one of Crown’s former directors, Geoff Dixon, said there was a “failure” in Crown’s regime when its workers were arrested.
Mr Dixon began as a journalist in rural NSW before a meteoric rise through government and private companies in the 1980s and 90s, an Independent Liquor and Gaming Authority inquiry heard on Thursday.
He was Qantas’ CEO from 2001 until he left for Crown in 2008 where he headed up multiple committees within the gambling empire and served on the board of directors.
Mr Dixon’s role as chair of the risk management committee came under scrutiny on Thursday.
He told the inquiry he believed Crown, who had staff in China, were always acting within the bounds of local laws as they promoted Melbourne and Perth casino trips.
He understood those staff were working from home because Crown did not operate any offices in China.
But Counsel Assisting Adam Bell SC told Mr Dixon the inquiry heard an unmarked building in Guangzhou was actually a covert office for Crown.
The unofficial office, which contained computers, customer information and gifts, was allegedly used to process visa applications for Chinese gamblers between 2015 to 2016.
A prior office was operated from 2012 until 2015.
The inquiry has previously heard that the office was operating below the radar of authorities where gambling and its promotion is illegal.
Mr Bell read an email, sent to Crown’s Australian resorts CEO Barry Felstead in 2013, that said the Chinese staff “are living in constant fear of getting tapped on the shoulder in a country where due process is inconsistently applied”.
Two years later, in 2015, South Korean casino staff were arrested as part of a crackdown by Chinese authorities.
The inquiry heard that Crown was on “high alert” and, weeks later, two employees were questioned by Chinese police.
Mr Dixon agreed was an obvious “escalation” of the risk faced by employees but the inquiry heard the board didn’t know at the time.
The following year, in October 2016, three Australian and more than a dozen Chinese staff were arrested in China on charges of gambling promotion.
Mr Dixon said he had no idea about the Chinese staff’s fears and it should have been passed on to his risk management committee.
“Certainly it reveals a failure of the executive management at that time to pass (the concerns) on to the board,” he said.
The inquiry is examining whether Macau junkets, with alleged links to Triad gangs, laundered massive sums of money through Crown’s private VIP rooms in Australia.
But Mr Dixon said Crown did not explicitly train directors on organised crime or money laundering.
“I used to go talk to people about anti money laundering,” he said.
“I knew it was one of the most important aspects of casinos and hotels which I’ve had interest in for 20 years.”
“But - no - my knowledge when I joined the board - there was no formal training at Crown into those sorts of things. It was learned on the job.”
Footage was played to the inquiry, on Wednesday, of a blue cooler bag stuffed with cash being unloaded in the private Suncity room in Crown’s Melbourne casino.
Director Helen Coonan previously told the inquiry she believed Crown’s ineptitude or lack of attention “enabled” suspected money laundering.
October 20: Crown casino ‘allowed’ suspected money laundering: Inquiry
A former Howard government minister and Crown director told an inquiry her casino “allowed” suspected money laundering when a junket alleged to have Triad links swapped a cooler bag packed with cash for gaming chips in a private VIP room.
Footage aired before an inquiry into the Packer gambling empire shows a blue insulated cooler bag, packed to the brim with bundles of cash, being unloaded onto a cash desk in the secretive “Suncity Room” in the Melbourne casino.
The Suncity room was set aside for junkets organised by Macau-based Alvin Chau, who regulator AUSTRAC said Crown knew was a “politically exposed person” with an extensive criminal history.
But the inquiry heard Suncity’s dedicated room was an “island of immunity” because Crown was under no obligation to report suspicious transactions under anti-money laundering regulations.
That video, shot in May 2017, was one of multiple examples aired before the inquiry on Tuesday where massive amounts of money moved through the Suncity Room which should have raised “red flags”.
Early in 2018 management discovered $5.8m in the Suncity Room meaning the operators had “magnificently breached” their cash limit of $100,000, Counsel Assisting Naomi Sharp SC said.
Crown director Helen Coonan, who served as John Howard’s Communications and Revenue Minister, said she didn’t know Suncity operated its own cash desk until allegations were aired in the media.
The room was audited by Crown staff but run by the Macau-based junket.
Ms Coonan stopped short of agreeing that the casino “turned a blind eye” to money laundering but agreed ineptitude or some other reason permitted it to happen.
“It may have been ineptitude or a lack of attention, I don’t know if it was deliberately turning a blind eye,” she said.
Commissioner Patricia Bergin put to Ms Coonan that it wasn’t unreasonable to say Crown had “facilitated” money laundering by failing to intervene for whichever reason.
“I think allowed it to happen,” Ms Coonan responded.
Crown didn’t become aware of the blue cooler bag footage until it was leaked in October-2018.
But the inquiry heard the casino’s anti-money laundering compliance officer concluded it was Suncity’s problem, not Crowns, once he reviewed it because it was Suncity staff handling the money.
“It is common practice for patrons to bring cash into casinos to exchange for chips, there is no obligation on Crown to lodge any threshold transaction in this instance as it is not involved in the transaction,” he wrote in a report read out to the inquiry.
Ms Coonan said she didn’t feel Crown was free from obligations to report suspicious transactions even if the law didn’t require them to do so.
The inquiry heard a report by WealthX, who do due diligence for Crown, said that Chau had allegedly been a former member of the 14K Triads in the 1990s in charge of loan sharking and moved to start his own gang.
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Ms Coonan said Crown didn’t want to deal with Chau “in retrospect or prospect”.
Crown analysed its VIP processes, last year, and in an internal report identified tightening money laundering regulations and closure of bank accounts as “threats”.
“That‘s just a heading,” Ms Coonan said.
“It’s a cost of business, all regulation is. It doesn’t mean it shouldn’t be there or it‘s wrong.”
Crown has suspended junkets until the middle of next year, partly because of COVID-19 and partly because of the investigations, but Ms Coonan would not rule out resuming them.
She said that would only happen after Crown had “calmly” worked through its reviews and may not resume at all.
Ms Coonan told the inquiry she was put in touch with James Packer when she left politics and asked if she‘d like to join Crown’s board.
She said she had met the Packers through her role as Communications Minister a handful of times before that contact.