Crown faces second junket class action as Maurice Blackburn files in Victoria

Law firm Maurice Blackburn has launched a class action against Crown.

Maurice Blackburn is seeking to recover compensation from Crown and is pushing for a potential share buyback Picture: AAP

Crown has been hit with a string of allegations surrounding its governance failures and links to junket operators as law firm Maurice Blackburn looks to secure support for a second class action against the gaming major.

The class action, filed in the Victorian Supreme Court, alleges failures of the Crown board to oversee and prevent money laundering for years, resulting in a huge destruction of shareholder value.

The class action comes after explosive allegations aired at the NSW casino inquiry this year and a public apology from Crown chairwoman Helen Coonan for “governance and risk management failings”.

The year from hell for the gaming giant has seen shares in Crown tank, trading 16 per cent down from pre-pandemic levels in February.

On December 10 wealth manager Perpetual sold 7.75 million shares in Crown, reducing its stake to 8.19 per cent.

Financial crimes regulator Austrac launched a formal investigation into Crown in October, having identified potential non-compliance with anti-money laundering and counter terrorism financing laws.

The regulator also alleged potential non-compliance in relation to ongoing customer due diligence, and maintaining and complying with an anti-money laundering and counter terrorism financing program.

Lawyers for Maurice Blackburn allege misconduct and failures by Crown between December 11, 2014 and October 18, 2020 which “had inadequate systems and processes for ensuring compliance with its obligations under anti-money laundering laws, including as they applied to its VIP international business and engagement with overseas junket tour operators”.

Maurice Blackburn alleges “Crown engaged in misleading and deceptive conduct; breached its continuous disclosure obligations; and conducted its affairs contrary to the interests of members as a whole in the period”.

In a statement Crown said it was aware of the class action but “has not yet been served with an originating process in respect to this proceeding”.

Shares in Crown closed up 0.7 per cent at $9.79.

Court documents lodged by Maurice Blackburn allege throughout the relevant period no member of the Crown board nor its chief financial officer “had specific training on anti-money laundering or counter terrorism financing risk and compliance” or the laws as they applied generally or to Crown.

Crown chief executive Ken Barton is alleged, during his period as CFO, to have known he had no training in anti-money laundering and that the only training offered to Crown employees was “an online training module, covering a range of areas, including AML”.

Mr Barton is also alleged to have known there was no training module available to directors until “around September 2020”.

Maurice Blackburn also alleges that Crown failed to formally assess new or existing junket tourism operators or participants.

Crown is also alleged to have taken “no adequate steps to ensure that the board of Crown was made aware of the nature and extent of fund deposits in overseas casino operations, and Crown’s (money laundering and terrorism financing) compliance risk”.

The documents allege from early 2014 to until around August 2019, one junket tourism operator, Alvin Chau Cheok Wa (Alvin Chau), an alleged member of the 14K triad branch, operated a cash desk inside Crown Melbourne for the exclusive use of the Suncity Junket.

“The Suncity Junket was one of Crown’s largest JTOs, with turnover in the billions of dollars in some years,” Maurice Blackburn said in its filing.

Maurice Blackburn claims that during the time which Crown permitted the Suncity Cash Desk to operate it was likely to facilitate money laundering.

Crown chairman John Alexander is alleged to have known about the $5.6m in cash found at the Suncity Cash Desk in 2018 and that the gaming company had “identified potential money laundering risks in respect of Alvin Chau and/or Suncity Junket”, according to the documents filed with the court.

“Crown did not report transactions at the Suncity Cash Desk to Austrac at all, or in any timely way, even though in mid-2017 Austrac suggested to Crown that it should lodge suspicious matter reports in respect of transactions at the Suncity Cash Desk,” the documents said.