Former Crown bosses let me down over China risks: Packer
Billionaire James Packer has pointed to who “let the side down” before more than a dozen of Crown’s staff were arrested in China.
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Billionaire James Packer accepts “some” but not all responsibility for failures in managing risks concerning Crown’s China-based staff before more than a dozen were arrested.
During his appearance at the NSW casino inquiry on Wednesday, Mr Packer said former chairman Robert Rankin and former chief executive Rowen Craigie “let the side down” when it came to managing the risks.
Mr Packer told the inquiry he was unaware Crown’s China-based staff held fears for their safety in the lead up to 19 being arrested in China in October 2016.
He also agreed it was unacceptable for staff of an Australian publicly-listed company to be in fear for the work they did and said that information should have gone to Crown’s risk management committee and then the board.
Mr Packer was also asked by counsel assisting, Adam Bell SC, why that and information about a China crackdown on foreign casinos in 2015 didn’t filter through.
“Do you agree that the failure to ensure the crackdown on foreign casinos announced by the Chinese authorities in 2015 was drawn to the attention of the full board of Crown Resorts and to all the members of the risk management committee demonstrates a failure in the risks management processes of Crown Resorts at the time?” Mr Bell asked.
“Yes I do,” Mr Packer replied.
When pressed why the failure occurred, he pointed to former chairman Robert Rankin and former chief executive Rowen Craigie.
“I believe Mr Rankin and Mr Craigie let the side down,” he said.
When asked if he accepted any responsibility for risk management failures during this period, Mr Packer said: “I accept some, not all, but some.”
Mr Packer, who was Crown chairman up to August 2015, said the risks to Crown employees were not worth the profits and he would have pulled out staff if he knew they were at risk of being jailed.
“The VIP business is not a huge part of the profitability of the overall business. To put ourselves at risk on so many fronts for that 7 per cent of our profit, or a number like that, just makes no sense,” he said.
“We tried as an organisation to build a very good culture.
“I’ve always said there are four stakeholders in the business - there’s government and regulators, staff, customers and community and there’s shareholders. If you do a good job on the first three, hopefully the shareholders will come out alright as well.
“This is not the culture of the company I was trying to build ... and for that I’m incredibly upset.”
Following the arrest and detention of the Crown Resorts employees, the company withdrew from China and ceased all operations of its VIP international team who were on the ground there.
PACKER QUIZZED ON WHAT HE KNEW ABOUT STANLEY HO
Mr Packer was also questioned about his company CPH Crown Holding’s agreement to sell 19.9 per cent of Crown shares to Hong Kong gambling giant Melco Resorts in May last year.
Lawrence Ho is chairman and chief executive of Melco Resorts and its parent company Melco International.
His father, Macau casino tycoon Stanley Ho, and any of his associates and entities, are banned by the NSW regulator from taking any interest in Crown’s new Sydney casino licence due to alleged links to organised crime.
Mr Bell put it to Mr Packer that he knew when he was talking to Lawrence Ho about the share deal that his father, Stanley Ho, and his associates were banned from taking a direct or beneficial interest in Crown’s new Sydney development.
“I regard Melco Resort’s as Lawrence’s company, not Stanley Ho’s,” Mr Packer responded.
“Would it be a fairer way of putting it that you just didn’t think about any regulatory agreements Crown had with the NSW regulator at the time of this transaction?” Mr Bell asked.
“I believe that would have been found in the legal preparation of the translation,” Mr Packer replied.
“When you were proceeding with the exchange of contracts with Melco you just didn’t give that matter any thought at all?” Mr Bell asked.
“I left it to my legal team and I gave it no thought. I’d forgotten,” Mr Packer said.
“Melco Resorts had been passed by regulators to be an associate of Crown in Australia on multiple occasions in multiple jurisdictions and in Las Vegas and Pennsylvania.
“Dr (Stanley) Ho was in a very sickened state and I do regard Melco Resorts as Lawrence’s company.”
“Isn’t the truth of the matter that you just didn’t give any truth at all to those regulatory agreements when you pressed the go button on the transaction with Lawrence Ho?” Mr Bell asked.
“I thought the legal work … would cover all eventualities,” Mr Packer said.
Stanley Ho died this year. He consistently denied allegations connecting him to organised crime.
The share deal has since been scrapped, with Mr Packer telling the inquiry Lawrence Ho partly blamed the impact of coronavirus for pulling out.
The NSW Independent Liquor & Gaming Authority is probing explosive allegations of money laundering and Crown Resorts’ links to organised crime as part of its inquiry.
It will consider if Crown has any links to entities or associates of ill repute as part of its new Sydney casino licence.
Yesterday, Mr Packer blamed his bipolar for a “shameful” email threat he sent to a mystery businessman in 2015.
Mr Packer admitted verbally threatening the man, Mr X, from a private equity firm Z Co, which was in talks at the time with Crown Resorts about a planned privatisation.
Mr Packer has also told the inquiry he is on medication for health issues that impairs his ability to recall events, including the period when he was director of Crown Resorts.
Mr Packer will return to give evidence when the hearing resumes at 10am on Thursday.
Originally published as Former Crown bosses let me down over China risks: Packer