Crown shareholders launch another class action against casino operator

Crown Resorts shareholders who have watched their investment plunge in value amid money laundering admissions want compensation for their losses.

Crown shareholders who have watched their investment plunge in value amid money laundering admissions want compensation. Picture: NCA NewsWire/Joel Carrett

Another class action has been filed against Crown Resorts after the gambling giant made explosive admissions about money laundering, triggering a share price fall that investors now want compensation for.

Maurice Blackburn filed the action in the Supreme Court of Victoria, alleging that between December 11, 2014 and October 18 this year, the company had inadequate systems in place to ensure it complied with anti-money laundering laws, contrary to shareholder interests.

The law firm said the action followed explosive evidence by Crown directors and executives at the Independent Liquor & Gaming Authority inquiry, which is determining whether the company is fit to hold a gaming licence for its new $2.2 billion casino at Barangaroo.

The evidence included Crown conceding at the inquiry it was “more probable than not” that criminals had laundered money through bank accounts of its subsidiaries, while chair Helen Coonan “unreservedly apologised” for “governance and risk management failings” at the company’s annual general meeting on October 22.

Crown chair Helen Coonan accepted at the inquiry that money laundering may have been facilitated due to ineptitude or a lack of attention.

The law firm noted Crown’s share price fell by more than 8 per cent on October 19 when financial crimes regulator AUSTRAC announced it had started an investigation into Crown and said the class action sought compensation and the potential buyback of investors’ shares at a fair value.

Crown said in a statement to the ASX on Monday it had become aware of the action but had not yet been served with an originating process.

Maurice Blackburn also called on Crown to implement “a proper anti-money laundering training program”, which the inquiry heard was not in place – despite its major focus on high rollers brought to its Perth and Melbourne casinos by Asian junket operators with alleged links to organised crime.

The inquiry was sparked by media reports last year claiming Crown at the very least turned a blind eye to ill-gotten cash pouring through the venues, with leaked video footage of massive amounts of cash changing hands in a “VIP” room widely broadcast.

The opening of Crown’s Barangaroo development in Sydney has been delayed. Picture: NCA NewsWire/Joel Carrett

During final submissions on November 18, commissioner Patricia Bergin was incensed when Crown counsel Robert Craig revealed two independent reports had concluded “cuckoo smurfing” could be seen in the accounts of two subsidiaries.

Cuckoo smurfing is a form of money laundering where large transactions are split into small transactions in a bid to disguise them.

“There was no notice of any of this,” Ms Bergin said.

“It just seems to me to be rather unsatisfactory.

“This material should have been produced last year or at the beginning in February when the material was summonsed.”

ILGA then announced the planned opening of Barangaroo this month would be delayed.

Ms Bergin is due to hand down her findings on February 1.

Despite no longer being a director, James Packer was given special treatment as Crown’s biggest shareholder.

Maurice Blackburn also initiated federal court action against Crown in 2017, saying it did not make timely and accurate disclosures to the ASX about activities that led to 18 employees being arrested in China, where gambling and promoting it – including luring high rollers offshore – is illegal.

The arrests triggered a 14 per cent share price plunge.

That case is expected to go to trial in early 2022.

Crown has promised to end its relationships with junket operators and earlier this month announced it had appointed a chief compliance and financial crimes officer, who would begin work on March 1.

The company’s biggest shareholder is reclusive billionaire James Packer, who has enjoyed special treatment as its biggest shareholder, receiving briefings that other investors were not privy to, the inquiry heard.

Originally published as Crown shareholders launch another class action against casino operator