Melco’s fresh response ahead of Crown Resorts public inquiry

HK casino giant Melco has offered this olive branch ahead of public inquiry following the Crown’s AGM.

Crown executive chairman John Alexander at the meeting

Hong Kong casino magnate Lawrence Ho’s Melco Resorts has offered a fresh olive branch to Australian regulators and parliamentarians ahead of a looming public inquiry into its suitability to be a major shareholder in Crown Resorts, by not voting at the casino giant’s annual meeting on Thursday.

The Australian understands Melco Resorts did not cast a vote on any resolutions at the AGM in Melbourne, heightening the protest vote against leading Crown directors Helen Coonan and Harold Mitchell, as the casino giant faced a fresh backlash at the meeting over its alleged links to organised crime.

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It is understood Melco’s decision was made to respect the processes of the looming NSW Independent Liquor and Gaming Authority inquiry into the sale in May by Crown’s biggest shareholder, billionaire James Packer, of a 19.9 per cent stake in the company to Melco.

Melco holds voting rights equal to 9.99 per cent of Crown shares after the first tranche of the share sale was completed, but the sale could be reversed if the ILGA inquiry finds Melco has links to Mr Ho’s father, Macau casino billionaire Stanley Ho.

Stanley Ho has long faced allegations of links to organised crime and Crown’s licence for its $2.4bn Sydney casino, granted in 2014, forbids it from dealing with a list of companies and individuals associated with Stanley Ho.

Melco’s decision not to vote ensured former advertising baron Harold Mitchell suffered the biggest protest vote against a director in Crown’s history, when 27.1 per cent of investors opposed his re-election to a final three-year term as a director.

Mr Mitchell is facing civil charges laid by the corporate regulator that he improperly helped the Kerry Stokes-backed Seven West Media win the broadcast rights to the Australian Open tennis tournament.

Ms Coonan — who is chair of Crown’s audit committee — suffered a 22.9 per cent vote against her re-election largely due to concerns among proxy advisory groups about the high level of non-audit fees paid to the company’s auditor, EY.

Shareholders at the meeting also expressed concern about her workload.

Crown also suffered a 17 per cent protest vote against its remuneration report at the meeting, which would have been over the 25 per cent threshold required to trigger a strike without 37 per cent shareholder James Packer voting his shares in favour of the report.

In further bad news for the group, Crown revealed that VIP program turnover at its Australian resorts fell by 46 per cent between July 1 and October 20 in the wake of the stunning media revelations against the company.

Crown has been outperformed by its rival, Star Entertainment, which enjoyed an increase in VIP visitation over the same period. Star vowed yesterday to spend $2bn on upgrading its existing Gold Coast casino if no rival gaming operation is allowed.

Crown chief financial officer Ken Barton acknowledged the decline in VIP turnover was a “significant number”, but denied it represented a trend because it was for such a short period.

“Macro-economics headwinds are contributing,’’ he said.

His comments were backed by JP Morgan, which told clients yesterday the key trading period for Crown was still to come, “specifically Christmas and the increasingly important November”.

Crown shares closed 8c, or 0.7 per cent, higher at $12.25.

The shares have recovered from the $11.15 mark they slid to in August in the weeks following the leak to the media of thousands of emails detailing the identities of the group’s high rollers and their alleged links to criminals.

The crisis at the company prompted Reverend Tim Costello to claim yesterday that Crown was a “burning platform”, prompting a rebuke from Harold Mitchell.

“I wouldn’t say this is a burning platform, that isn’t the case at all,’’ Mr Mitchell said. On the allegations that have been levelled against Crown, Mr Mitchell said: “I do care about this organisation … I care about the reputation of this company … When we see those things occurring out there. I worry for my people.”

Earlier the company’s executive chairman, John Alexander, reiterated the company did not tolerate illegal activity by its employees or patrons and described the media allegations as “sensationalist and unproven”.

Ms Coonan, who also chairs Crown’s corporate responsibility committee, revealed she had chaired eight meetings of a subcommittee of Crown’s independent directors assembled to consider the extensive media allegations made against the group in recent months.

She claimed the allegations were made “with scant regard to the facts” and noted anti-gambling campaigner, federal MP Andrew Wilkie, and the award-winning journalist who published the allegations against Crown, Nick McKenzie, had not sought meetings with her.

“Allegations are not facts. That is precisely why we have taken the steps we did,’’ she said, referring to the full-page advertisements taken out by the Crown directors rebutting the allegations.

Former AFL chief executive Andrew Demetriou, who suffered only a small protest vote against his re-election to the Crown board, said he had signed the advertisements taken out by the board rejecting the media allegations. “I have been very disappointed in what has been reported. None of us enjoy being called into question from a reputational perspective,’’ he said.