Crown’s Ken Barton and Andrew Demetriou to resign after report on James Packer’s ‘disastrous’ influence

Another two senior figures at the gaming giant are on the way out after a damning report on the casino giant saw James Packer cut ties.

Crown CEO Ken Barton is expected to bow to pressure to resign following a damning report that revealed money laundering at the firm’s casinos.

Mr Barton indicated that he would resign during a meeting with Crown chair Helen Coonan on Thursday, ABC News reports.

Ms Coonan was exonerated of any wrongdoing during the NSW Independent Liquor and Gaming Authority inquiry, but ILGA chair Phillip Crawford noted that her “heavy reliance” on the advice of Mr Barton was unfortunately “misplaced”.

The CEO’s expected departure follows the resignations of Crown directors Guy Jalland and Michael Johnston on Wednesday, which prompted James Packer to cut ties with the gaming giant’s board.

Board member and former AFL chief executive Andrew Demetriou also tendered his resignation late on Thursday night.

“I have always been a team player and supported the greater good,” the Crown Resorts director said in a statement seen by The Australian. “I will therefore step down from the Crown Resorts board to give Crown the best possible chance of becoming suitable to the NSW regulator.”

He added that he believed the comments directed at him in the report by the NSW gaming regulator were “unfair and unjust” and said he would defend his reputation “at every opportunity”.

Mr Demetriou called Crown “a great company, with outstanding people who serve the company well” and said the Barangaroo venue, whose opening has been delayed, “will be a magnificent addition to the Sydney landscape and I look forward to when it is fully operational.”

Crown CEO Ken Barton is the latest senior figure at the gaming giant expected to resign.

‘DISASTROUS CONSEQUENCES’

Mr Packer’s private company Consolidated Press Holdings (CPH) has ended its consultancy arrangement with Crown — effectively removing all influence by the billionaire over the company’s board.

He was spared a lot of personal criticism in the ILGA’s money laundering inquiry findings, but his influence over the casino giant was said to have “had rather disastrous consequences”.

The reclusive billionaire’s private investment vehicle CPH was the gambling company’s biggest shareholder with a 36.8 per cent stake and has yielded great clout over the board, management and operations.

That is expected to have ceased with the swift departure of all three CPH nominees from the Crown board the day after a near year-long inquiry by the ILGA handed down its findings about organised crime-linked money laundering at its Perth and Melbourne casinos.

The scandal has already led to the planned December opening of Crown’s new $2.2bn Barangaroo venue being put on hold, with the inquiry recommending the gaming licence be revoked in light of the bombshell revelations.

The massive development could prove a white elephant for Crown, given Mr Crawford told ABC radio on Thursday that the company “haven’t operated in this state yet and they may never”.

But he gave the Australian Securities Exchange-listed organisation some hope, encouraging it to continue the board overhaul, saying more heads need to roll before the liquor licence for Crown Sydney expires in April.

For Mr Packer – who got special briefings on an almost daily basis under a “controlling shareholder protocol” that has now been axed – there’s a chance he will have to reduce his interest.

Mr Packer with director Andrew Demetriou (right), who gave a ‘quite bizarre performance’ at the inquiry, and ‎executive vice president strategy and development Todd Nisbet. Picture: Aaron Francis/The Australian

Among her many recommendations, inquiry commissioner Patricia Bergin suggested preventing an entity from acquiring, holding or transferring an interest of 10 per cent or more in a casino licensee without the prior approval of a new dedicated regulator, which would have the powers of a royal commission.

But the former judge was rather sparing when it came to personally criticising Mr Packer, who gave testimony to the inquiry, remotely via video link, revealing he suffers from bipolar disorder.

The inquiry report said it was clear his influence “and his capacity to remotely manoeuvre aspects of Crown’s operations” despite quitting the board in 2018 – both through his own direct communications and by inserting Michael Johnston in managerial positions to assist him – “although obviously well-intentioned, had rather disastrous consequences for the company”.

The inquiry heard Mr Packer was the driving force behind the push to secure more of the high-roller ‘junket’ market – with a particularly shocking consequence of that being the arrest of 19 employees in China in 2016 as the nation cracked down on gambling, which is illegal on the mainland.

Will Crown Sydney at Barangaroo become a white elephant for the company? Picture: David Swift

“The corporate needs of Crown were not given precedence over the corporate needs or desires of CPH,” the report read.

“It is obvious that the real power was exercised by Mr Packer both by reason of his personality and also the somewhat supine attitude adopted by Crown’s operatives.”

The effects of that combination permeated Crown’s operations in China and its junket operator choices, the report read.

It also permeated the ill-fated sale of some of CPH’s stake in Crown to Hong Kong gaming giant Melco – which has links to the late Stanley Ho, who allegedly had underworld connections – and “the total blackout of information” relating to two bank accounts the ill-gotten money percolated through.

The report said “amazingly”, Mr Packer “did not turn his mind to the prospect” Mr Ho had an interest in Melco, with the inquiry hearing he was insistent the deal go through.

Mr Packer was given special briefings on an almost daily basis. Picture: Aaron Francis/The Australian

Arguably, the most personally tarnishing evidence at the inquiry was Mr Packer threatening a mysterious businessman – whose name was not revealed – in emails in 2015.

It was submitted the “very serious threat … demonstrates a flaw in his character such as to adversely affect his integrity”.

On the witness stand, he admitted the conduct was shameful and disgraceful but blamed his mental health problems, saying he had been on strong prescription medication for years.

That complicated the assessment of whether Mr Packer was forgetful or not, the report read.

Mr Packer expressed the belief the medication “impaired my ability to recall past events including in relation to the period I was a director of Crown”.

That also included forgetting the provisions of regulatory agreements aimed at ensuring Mr Ho or any of his associates acquired an interest in the company.

Whether it was Mr Packer’s “forgetfulness or failing to turn one’s mind” to ensuring casinos remain free from criminal influence, either was a “deeply flawed attribute” that “must surely be intolerable”, the report read.

Originally published as Crown’s Ken Barton and Andrew Demetriou to resign after report on James Packer’s ‘disastrous’ influence