Crown inquiry: Packer’s directors Guy Jalland, Michael Johnston exit
James Packer goes on the front foot in the wake of the findings of the Crown inquiry, cutting his company’s ties with the board.
Billionaire James Packer has gone on the front foot in the wake of the damning findings of the NSW ILGA inquiry against Crown Resorts, announcing plans for two of his three nominee directors to resign from the board of the gaming company.
Mr Packer’s private company Consolidated Press Holdings, which owns 37 per cent of Crown, announced on Wednesday morning that CPH’s nominee directors on the board Guy Jalland and Michael Johnston would be stepping down.
Crown announced shortly after that it had accepted the resignations.
“CPH is considering the report by the Hon PA Bergin SC that was made public yesterday. CPH welcomes the finding that the Melco transaction did not constitute a breach of the Barangaroo restricted gaming licence or any other regulatory agreement,’’ CPH said in a statement.
“CPH and Mr Packer now believe it is crucial that Crown chairman Helen Coonan and the Crown Board have the opportunity to meet with ILGA to progress Crown’s announced reform agenda.”
CPH said Guy Jalland and Michael Johnston had today given the Crown chair a notice of resignation from the Crown board which is to take immediate effect.
On Tuesday afternoon, Crown announced it had also been informed by non-executive director John Poynton that his consultancy arrangement with Consolidated Press Holdings
Pty Limited had been terminated and, as a result, he is no longer a nominee of CPH on the Crown board.
Earlier, Mr Packer’s private company said CPH proposed to end the consultancy with Mr Poynton. However, Mr Poynton will request from the Crown board the opportunity to be considered an independent director of Crown once the CPH consultancy has ended, CPH said.
“With the resignation of the two CPH nominees on the Crown board and the ending of the consultancy with Mr Poynton, CPH will have no involvement on the Crown board. The issue of CPH’s representation on the Crown board, and future communications between those representatives and CPH, were potentially complex matters for ILGA and Crown to resolve.” “The steps announced today take them off the table, giving Crown’s board clear air to work with ILGA in the execution of its announced reform agenda, and become a model casino operator. CPH supports these efforts.”
Crown last year scrapped special agreements with CPH which gave Mr Packer confidential information about its operations and allowed CPH executives to be paid to provide services to Crown.
The Bergin inquiry has proposed imposing a 10 per cent shareholding cap on any single investor in Crown, which could lead to Mr Packer selling down his interest or applying to the casino regulator for approval to maintain his holding.
NSW and VIC Premiers react to scathing Crown report
NSW Premier Gladys Berejiklian would not be drawn on Wednesday over whether further resignations were required of Crown’s board, per the findings of the Bergin report.
However she did say the inquiry outlined with abundant clarity what the company needed to undertake in order to be deemed “suitable” for a licence by the state’s gambling regulator.
“Commissioner Bergin has set out the conditions which would make consideration of any future licence acceptable – it’s all there in black and white. I’m sure both Crown and any other organisations will read that report carefully and accept what action has to occur before anybody can have a licence in NSW,” she said.
The report made numerous recommendations in relation to Crown’s operations but also pointed to legislative amendments that should be considered by the NSW Government, including some which would help establish an Independent Casino Control authority with standing royal commission powers.
Ms Berejiklian said the government would wait until it received further advice from the gaming regulator before accepting any recommendations contained in the report.
“Obviously, and can I stress this point, whilst we accept Commissioner Bergin’s report, the NSW Government is awaiting independent advice from ILGA (the Independent Liquor and Gaming Authority) – it’s their job as the regulator to absorb the report and give recommendations to government,” Ms Berejiklian said.
“It’s up to ILGA to provide government with advice on what needs to occur, but Commissioner Bergin, can I safely say, has outlined what action, in her view, needs to be taken.”
Asked whether she stood by the NSW Government’s unsolicited approval process, which allowed Crown Resorts to build the Barangaroo development without having to compete against other companies, Ms Berejiklian said it was a robust mechanism that had proven successful for the state.
The Australian reported on Wednesday that Crown was given advanced notice of the unsolicited approval process by former premier Barry O’Farrell. Mr Packer and Mr O’Farrell held a meeting at the home of media identity Alan Jones in 2012, months before the unsolicited approval process had been signed off by cabinet.
Ms Berejiklian said it was not always necessary for projects to have to compete for contracts in a tender process because some developments offered unique benefits to the state.
“Sometimes there is what’s called “uniqueness”, which is what the process is about. The unsolicited approval process is very robust, it’s proven very successful – Northconnex wouldn’t have happened if not for that process.”
Victorian Premier Daniel Andrews says it was too early to answer whether Crown Melbourne should keep its gaming licence.
“We’ve already begun the process of reviewing the findings of the inquiry in NSW,” Mr Andrews said.
“We’ve already made some announcements about the bringing forward of the five-year review and we’ll have more to say about that matter soon.
“These are very serious issues and we take them very seriously, but I don’t think it unreasonable for us to - just as I think the NSW government are doing - we’ll look at those findings, they were only handed down yesterday and we will have more to say soon.”
“Whether it be by investigation or by - quite shamefully - by admission, there’s a need for us to have a look at all these issues ... by admissions made by very senior people at Crown,” he said.
“So, we will review - and we won’t waste any time doing it - we’re looking very carefully at all the different findings that have been made and we’ll have more to say quite soon.”
When asked if the Victorian regulator had failed, the Premier said he did not accept that proposition.
“However,” he said “we’re not stubborn about this. If there’s a need for improvement, anywhere in government, then we stand ready to do that.
“There’ll be a day to have a very long discussion about all these issues.
“But we do have to just take the time to read the thing, go through it, understand it, maybe speak to NSW ... I’m not sure how that would work, but, very soon, once we’ve considered what was handed down just yesterday, we’ll have announcements to make.
“We announced some time ago - before Christmas - that we were bringing forward the five-year review, not for fun but because we have significant concerns.
“We’re reviewing the findings again, not as a pro forma exercise, but because we have significant concerns.
“Once we’ve done that - and it won’t be months, we’ll do it quickly - then we’ll have more to say about it then.”
The announcement of a special commissioner to lead the review has not yet been made because, the Premier said: “You’ve got to be meticulous in having exactly the right person to do that work and we’ll have announcements to make about that soon.
“There are a number of people that we’ve been speaking with and, some people are available - they’re busy people doing other work - some people aren’t, and you’ve got to have somebody who is absolutely impeccable, not just because of who they are but the way they are viewed.
“So it’s a very important choice.”
Crown ‘needs to blow itself up’: regulator
Chair of the NSW Independent Liquor & Gaming Authority Philip Crawford says the idea that Crown Resorts “needs to blow itself up to save itself” is “probably pretty close to the mark”.
But he has indicated Crown’s Barangaroo gaming floor could open as soon as April, even with James Packer as a major shareholder in the company.
Speaking in Sydney on Wednesday, the chair of the regulator that oversaw the inquiry into Crown’s suitability to operate its $2.2bn Barangaroo casino in Sydney said he would not be going into detail on the report’s finding before his board convened on Friday.
But he did say that he had contacted Crown chair Helen Coonan to begin a required process of consultation with the company.
“There’s also a quite complex set of contractual arrangements between the state and Crown entered into seven years ago,” he said. “One of those … is to consult with Crown in circumstances such as we have at the moment.”
ILGA denied Crown’s bid to open the gaming floor at Barangaroo last December, saying it would wait for the release of their inquiry’s findings, which were tabled in parliament on Tuesday.
A temporary liquor licence was granted for the hotel’s non-gaming areas, but it runs out in April.
Additional reporting: Yoni Bashan, Lachlan Moffet Gray
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