Arrests ’don’t affect us’, Crown directors told

Former Crown director says she was told about China’s arrest of 13 South Koreans more than a year before Crown’s own workers were arrested.

Former Crown Resorts director Rowena Danziger. Picture: Daniel Wilkins

A former Crown Resorts director has revealed that she and other members of the company’s board were informally told about the arrest of 13 staff of two South Korean gaming companies by the Chinese authorities in June 2015, but were advised the issue “did not affect” Crown.

Former Crown board member Rowena Danziger, the first of the company’s directors to be examined by a public inquiry into the James Packer-backed casino giant, revealed on Monday that she was informally briefed on the Korean arrests by fellow board member Michael Johnston, who is the financial controller for Mr Packer’s private company Consolidated Press Holdings.

“On a day that we would have a number of meetings, there would be a number of board members and staff in the room between meetings having a coffee. I remember Mike Johnston coming into the room and saying that these arrests have happened and that he had legal advice they were not about things we were doing. That it did not affect us. That we were all right,’’ Ms Danziger told the inquiry.

Asked if there were others in the room that heard Mr Johnston’s advice, she replied: “Yes. There were people. They were all either board members or senior staff,’’ she said, before noting she could not recall individual names. She noted the board was never formally briefed on the issue.

Crown’s Australian Resorts chief executive Barry Felstead claimed last week that Crown received external advice that the Koreans were “allegedly doing things against the current guidelines for operating in China”, including making currency transfers out of the country.

He understood their actions were different to those of Crown staff in China.

Sixteen months later, 19 of those Crown staff were arrested for committing alleged gambling crimes.

Ms Danziger said on Monday she was unaware Mr Johnston had a particular interest in Crown’s VIP operations. Mr Johnston was a member of a so-called CPH VIP working group that was constantly appraised of the situation on the ground in China by its group executive manager of VIP Jason O’Connor, and international marketing president Michael Chen.

Ms Danziger, who was a member of the Crown risk management committee in October 2016 when the staff were arrested, said neither she or members of the committee were told about two Crown staff in China being questioned by Chinese police in July 2015, where one was accused of organising people to gamble in Australia.

Crown Australian Resorts chief Barry Felstead confirmed last week that he authorised the Chinese authorities to be sent a letter confirming the staff member worked for Crown but omitted its involvement in gambling.

Ms Danziger said she and members of the committee were unaware of the letter. Last week former Crown chief executive Rowen Craigie said he was also unaware of the Crown staff being questioned or the letter being sent by Mr Felstead.

While Ms Danziger retired from the Crown Resorts board in 2017, she remains a director of Crown Melbourne and is still a member of its compliance subcommittee.

She was asked by the inquiry head, former NSW Supreme Court judge Patrica Bergin, about changes to Crown’s VIP model in recent years following the China arrests.

“The new risk program developed largely by Anne (Crown’s Group General manager risk and audit, Anne Siegers) has been put into use,” Ms Danziger said.

“I was always very happy before about what we did about anti-money laundering and Austrac and the Victorian regulator. The new risk parameters Anne and the Crown Resorts board have put into place are very good and I think are being carried out very conscientiously. Errors or gaps, things we didn’t realise, have been addressed.”

Barry Felstead told the inquiry last week that Crown had made substantial changes to its risk management processes since the China arrests, including the appointment of Ms Siegers.

“We have a new group role to manage risk at both (the Melbourne and Perth) properties and extra resourcing on risk,’’ he said, adding there were now individual risk registers Crown’s overseas staff and additional layers of control at the company’s various boards and their subcommittees around risk.

The inquiry is examining whether Crown should retain its licence for its soon-to-be-completed $2.4bn Sydney casino, which will open in December. It will reconvene next Monday.