Crown Resorts’ lack of transparency ‘reached debacle level’, says inquiry commissioner

The Commissioner running a public inquiry into Crown Resorts has slammed the group’s lack of transparency.

Senior Crown executives cautioned the company’s executives about rushing out an advertisement before the media claims it was denying could be properly investigated.

The Commissioner convening a public inquiry into Crown Resorts has described the company’s lack of transparency as having “reached a debacle level” amid further revelations about the company’s poor risk management and questionable disclosure practices.

On Wednesday Crown chief executive Ken Barton denied misleading shareholders at last year’s annual general meeting of the company over the information he shared with its major shareholder James Packer.

Asked by a shareholder at the meeting whether Mr Packer received confidential information or briefings about Crown, Mr Barton failed to disclose the company had a controlling shareholder protocol with Mr Packer which ensured he received almost daily updates on its finances.

While Mr Barton claimed the details of the protocol were confidential, he acknowledged: “In hindsight I could have easily answered the question to say Mr Packer also gets information.”

Mr Packer is due to appear before the inquiry next week.

Separately, Mr Barton — formerly the company’s former chief financial officer — acknowledged multiple failures in Crown’s risk management systems in relation to its anti-money laundering (AML) processes, on numerous occasions acknowledging he had only become aware of compliance failures in the past year.

His comments prompted the Inquiry Commissioner Patricia Bergin to exclaim: “There has to be some more transparency, because this in effect has really reached a debacle level … Mr Barton has made a lot of concessions, but at the moment it is just extraordinarily troubling.”

Mr Barton acknowledged Crown had too often in the past taken an approach of simply meeting its reporting requirements without undertaking further due diligence on its customers and bank accounts.

“That is an area we need to improve, not just looking at complying with our obligations but being more proactive in preventing money laundering,’’ he said.

“It is critical. There are some things we can do immediately to work on the prevention of money laundering.”

He said the company’s AML function was previously under-resourced, highly manual and that there were not direct reporting lines to the board in relation to AML issues.

“There are some areas where we have the ability to do a much more extensive job identifying potential risk areas,’’ he said.

The inquiry by the NSW Independent Liquor and Gaming Commission is considering Crown’s suitability to retain its licence for its Barangaroo casino in Sydney due to open in December.

Earlier, Crown’s General Counsel and Company Secretary Mary Manos acknowledged she failed to check transactions being made through two Crown companies, Riverbank and Southbank Investments, following media allegations they were used for money laundering linked to organised crime.

Ms Manos was the company secretary of both companies.

They are no longer being used by Crown and are currently in the process of being deregistered after a number of major banks refused to provide banking services to them in the wake of the media revelations.

“I could have asked more questions with the benefits of hindsight,’’ Ms Manos said, after being chastised by Ms Bergin for stating it was not her role to “get down on her hands and knees” to go through “boxes of dusty bank statements.”

Ms Bergin said “(getting) down on your hands and knees and (looking) at dusty bank accounts” was “the very thing that should have happened, surely?”

Ms Manos also revealed she cautioned the company’s directors against rushing to release a bombshell newspaper advertisement last year that was lodged with the Australian Securities Exchange rejecting a raft of media allegations against the company.

Ms Manos said she was concerned about the limited time that had been available to the company to investigate the allegations before the directors released the advertisement that they all signed.

“My advice to the board was that the full page advertisement was that something that should be approached with caution,’’ she told the hearing.

She said the board had published a full-page advertisement the previous year — which related to alleged blanking of poker machines — and “there were certain events that arose from that experience which I felt warranted some caution the second time around.”

But her advice for a cautious approach was not accepted by the board.

Ms Manos said the company’s directors had serious concerns about the reputation of the business in the wake of the allegations, which alleged Crown’s lax risk management practices allowed it to partner with junket operators with links to drug traffickers, money launderers, human traffickers and organised crime groups.

“My advice was one aspect of the matters they considered in coming up with their decision,’’ she said.

The inquiry has heard evidence of media reports and legal cases highlighting where money laundering had occurred in Crown’s casinos and where that money had been linked to drug trafficking, which has raised questions about the wisdom of the director’s decision to approve the advertisement.

In his evidence to the inquiry Crown’s chief legal officer Joshua Preston has also contradicted statements made in the advertisement.