Crown Resorts opens Barangaroo doors to casino inspectors
Crown Resorts is willing to have permanent government inspectors on the gaming floor of its Barangaroo Casino.
Crown Resorts is willing to have permanent government inspectors on the gaming floor of its Barangaroo Casino if it is forced to undergo a “conversion” period to retain its licence, but has resisted a push for its major shareholder James Packer to reduce his voting rights and board influence.
On Thursday commissioner Patricia Bergin, heading the NSW Independent Liquor and Gaming Authority’s inquiry into Crown’s suitability to operate the casino, asked Crown’s counsel Neil Young QC what would happen to the casino if her findings necessitated a “conversion” period from unsuitability to suitability.
“Many of the matters the authority may wish to be satisfied about are going to be matters that require a working test, as it were,” Mr Young replied.
“We don’t suggest that … all of this needs to bring about a complete postponement of the commencement of operations.”
Crown shares fell more than 4 per cent on Thursday before recovering to close 1.87 per cent lower at $9.46.
Mr Young said Crown was willing to have permanent gaming regulatory inspectors on the floor of the Barangaroo casino to allow “real-time” monitoring of Crown’s systems by the regulator through “inspectors” on the floor or daily reports.
Crown chairman Helen Coonan has been under pressure from the company’s shareholders to include the nominee directors of Mr Packer’s Consolidated Press Holdings in the board renewal program she has pledged to undertake.
Investors have also urged her to consider the proposal put by Counsel Assisting the inquiry that Mr Packer’s voting rights in Crown be reduced to below 10 per cent and that CPH’s board representation be reduced to a single director from the current three nominees after it was asserted Mr Packer had a “deleterious” impact on Crown’s corporate governance.
Such a plan would allow Mr Packer to retain his 36.7 per cent shareholding in Crown and would protect minority investors from a forced selldown of the holding at a substantial discount.
But Mr Young said there was no need for these measures as the company had recently cancelled two agreements that allowed confidential information to be shared with CPH and James Packer.
“Crown‘s relationship with CPH has been pulled back so that the position is the stock-standard relationship between the company and its major shareholder,” he said.
Ms Bergin also suggested she would find that the influence of CPH nominee director Michael Johnston had “blurred” reporting lines of risks to Crown staff in China before their ultimate arrest in 2016 for illegally promoting gambling.
But she said that it was likely Mr Johnston’s failure was not deliberate and that his many roles at the company meant he didn’t realise staff with knowledge of China risks came to him ahead of others. “In some senses it was benign because it was so unfortunate ... in terms of what Mr Johnston did, it was his trouble with too many hats again,” she said.
“I don’t think he stopped for a second to say ‘what are they looking at me as?’ But he was clearly the most powerful person in the room when Mr Packer wasn’t there. It doesn‘t seem to me a dishonest or malevolent connection.”
But she did question why the actions of CEO Ken Barton should not influence her findings on the company’s suitability, noting a discrepancy in his submissions regarding ANZ alerting him to money laundering activity in the bank accounts of Crown subsidiaries Southbank and Riverbank Investments.
In his fourth statement to the inquiry last week, Mr Barton said there were no failures or serous issues identified by ANZ, but he reversed that position in a fifth statement tendered on Sunday.
Mr Young said Mr Barton did follow up on the email with a phone call, and had a “misapprehension” about the seriousness of the email.
But Ms Bergin said the fact that upon reflection five years later he still did not recognise the seriousness of the email was concerning.
Ms Bergin also asked Mr Young what she should think about Crown director and ex-AFL boss Andrew Demetriou bringing notes into the witness box without declaring them, and then lying about the extent to which he relied on them.
Mr Young defended Mr Demetriou’s actions as an honest mistake before similarly defending Crown directors Jane Halton’s “lengthy” answers to the inquiry and Harold Mitchell’s recent fine for breaching his duties as a director of Tennis Australia in a “narrow” way does not “impugn” him in the context of his role at Crown.
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