Crown China arrests a governance failure: former CEO Rowen Craigie
Rowen Craigie has admitted a failure of corporate governance left him and the Crown board gravely misinformed about its China staff.
Former Crown Resorts chief executive Rowen Craigie has admitted a failure of corporate governance left him and the Crown board gravely misinformed about the predicament of the company’s staff in China, which led to their arrests in October 2016.
In testimony to an inquiry into the affair on Thursday, Mr Craigie said if he and the board’s risk committee had been made aware of the staff’s concerns for their safety and a range of other risk and compliance issues, they could have potentially been moved to in Singapore for a period.
He said he relied solely on advice about the China situation relayed by Crown’s VIP team comprising its Australian Resorts boss Barry Felstead, group executive manager VIP Jason O’Connor and international marketing president Michael Chen.
“If I had my time over again, I could have interrogated the advice that I did get more. I certainly believe that if I had been in receipt of information that I didn’t get, there would have been a broader group of people brought in to look at alternative courses of action,’’ Mr Craigie said.
“The decision by VIP, they described as managing it on the ground, was not the right decision That risk assessment was clearly flawed.”
Asked if his being left in the dark on a range of issues which should have been elevated to the board’s risk committee was a failure of Crown’s corporate governance, he replied: “Yes I accept that.”
The inquiry heard on Tuesday that two Crown staff in China were questioned by Chinese police in July 2015, where one was accused of organising people to gamble in Australia.
Mr Felstead then authorised the Chinese authorities to be sent a letter confirming the staff member worked for Crown but omitted its involvement in gambling.
Mr Craigie confirmed on Thursday that neither he or the risk management committee of the Crown board was told about the interrogation of Crown’s staff or the letter provided to the authorities.
“I don’t recall this letter ever being presented at a board meeting or discussed or any paper on the police questioning coming up to the board,’’ he said.
But Mr Felstead did send information about the questioning of Crown’s employee to Crown director Michael Johnston, who represents the interests of major shareholder James Packer.
Mr Packer’s special assistant Ishan Ratnam was also made aware of the letter.
Mr Craigie said he did not inform Mr Packer, who stepped down as Crown chairman in August 2015 and resigned from the board in December that year, about any issues involving Crown’s China staff.
However he did reveal Mr Packer held a strong interest in the finances of the company’s VIP operations and set up monthly CEO meetings when he was chairman where the VIP performance was discussed.
“Mr Packer wanted to drill down into this part of the business (VIP international). He had a particular interest in it,’’ Mr Craigie said.
“It has clearly got links to what is happening in the rest of the world. Mr Packer had a particular interest in Asia, in China and the joint venture with (Lawrence Ho’s) Melco (Group) of which he was the architect. He was drawn to the mathematics of the VIP business as well.”
The CEO meetings were also attended by Michael Johnston and Mark Arbib, who was also an executive of Mr Packer’s private company Consolidated Press Holdings.
“Within CPH my assessment would be that Mr Packer relied on three key advisers: Michael Johnston on financial, Guy Jalland on legal matters and Mark Arbib on government relations and media.
Mr Packer welcomed their input and wanted them exposed to the Crown management team and the CEO reports so they could be in a better position to advise him,’’ Mr Craigie said.