When Helen Coonan told Ken Barton on the afternoon of February 11 that his time was up as Crown Resorts chief executive and she put her hand up to be executive chairman for the toughest period in the casino giant’s history, she knew what was coming.
The Bergin inquiry in NSW into Crown’s multiple failures of governance and risk management was so comprehensive and damning that the two states where Crown actually runs casinos — Victoria and Western Australia — were always going to take decisive action in response. It was just a matter of when.
The West Australian government got in first when last week it announced an inquiry into Crown Perth, parts of which could be held in public, as was the Bergin inquiry.
Daniel Andrews’s Victorian government went one better on Monday with the announcement of a royal commission, arguably an over-the-top response given the exhaustive and detailed work of the Bergin hearings but one that was utterly inevitable given the politics at play.
The biggest issue for Coonan now is the distractions that will be created inside Crown — a company with low staff morale and already reeling from a year in the headlines — by these investigations.
These at the same time as Coonan needs to fast-track work on the 17 major reforms Crown has promised to make itself suitable to retain its Sydney licence, only two of which have been completed.
She will now surely be fast-tracking her plans to appoint a chief operating officer to ensure the business can continue to run day to day while she and Crown’s legal team deal with Crown’s reformation and these inquiries.
It will also give her more scope to work on making new appointments to the Crown board, following the inevitable resignation of nomination committee chief Harold Mitchell on Monday afternoon.
It was fast becoming clear at the weekend that if Mitchell did not leave of his own accord, shareholders or even his remaining fellow directors would want him out.
One of those, the late Kerry Packer’s doctor John Horvath, now looks set to delay his announced departure until new directors are found to replace him, Mitchell and the three others to have resigned in the past 10 days.
There is some solace in the Victorian and WA announcements for Coonan and Crown.
Victoria wants its recommendations by August 1, while the WA inquiry is set to take about four months. That will give both investigations little time to dig much deeper than the Bergin hearings, especially if each is also considering the issue of new casino regulatory regimes in each state.
Another bonus for Crown is the appointment of the thorough and savvy former Federal Court judge Ray Finkelstein QC to serve as commissioner.
One of Coonan’s most trusted advisers is “Mr Fixit” Leon Zwier, the Arnold Bloch Leibler partner who calls Finkelstein his mentor and friend.
On a cold July night in 2017, Finkelstein turned up at St Kilda’s Newmarket Hotel for Zwier’s 60th birthday celebration, along with a who’s who of Melbourne business and legal circles.
Even if Finkelstein is able to unearth skeletons in Crown’s Melbourne closet that Patricia Bergin in Sydney was unable to find, they will arguably only help Crown in its reformation process as long as they don’t blow up the company.
Crown will not be able to withstand further damaging revelations, say, in a year’s time, especially if in the interim it is able to reform itself to the point where it is again found suitable to run its new casino at Barangaroo in Sydney.
For James Packer, the news of the Victorian royal commission will, of course, be unwelcome.
But perhaps it will further solidify the billionaire’s thinking that time is on his side: there is no pressing need to sell all or part of his 37 per cent shareholding, and the shares will only increase in value if Crown can get through another six months of pressing regulatory scrutiny.
The challenge for Packer will be, for the first time in his life, remaining a passive and out-of-the-loop shareholder in the company that holds the bulk of his life’s fortune.
No Packer in history has ever done that.
Women’s health start-up founder raises $1.7m
A young Melbourne doctor has scored $1.7m from investors who see mass potential for her women’s health app Ovum.
Biggest problem for Qantas in 2025: Where to hide the cash
Vanessa Hudson will spend 2025 trying to restore Australia’s impression of Qantas, even as the airline rakes in the profits from domestic flyers.