James Packer’s ‘sadness’ at cutting ties with troubled Crown Resorts

Billionaire James Packer reveals his ‘sadness’ over severing ties with the Crown Resorts board­ after a devastating week.

Billionaire James Packer. Picture: AAP

Billionaire James Packer has declared his sadness at severing his longstanding ties with the Crown Resorts board­ following former Supreme Court judge Patricia ­Bergin’s damning report into the ­company.

But Mr Packer stressed that ­extracting the influence of Consolidated Press Holdings — his private company, which owns 37 per cent of the gaming giant — from Crown’s board was essential in ­ensuring the $6.6bn company’s rehabilitation and, importantly, regaining its suitability to hold a licence for its new $2.2bn casino in Barangaroo.

“It’s been an extremely difficult period for everyone involved and I feel deeply for the thousands of Crown employees across the country,” Mr Packer told The Weekend Australian on Friday.

“I want to see Crown recover as best as possible. It’s important that CPH gets out of the way and has no involvement other than as a passive shareholder.

“Having our directors resign was an important step to give Crown the clear air it needs to get on with reform. Of course I am sad about the separation, but it’s the right thing to do.”

His comments come after a ­tumultuous week for Crown, in which Ms Bergin declared it was not ­currently suitable to hold a ­casino licence in NSW and regulators in Victoria and WA also issued critiques of the company. Late on Friday, Crown was ­positioning to announce Helen Coonan as the company’s executive chairman, replacing chief executive Ken Barton.

Ms Coonan was the only Crown official to emerge positively from the Bergin report. This week she met NSW and Victorian gaming regulators as she began her “root and branch” reform of the company.

But Crown was left reeling further on Friday when its flagship Melbourne casino was again forced to close after Premier Daniel Andrews announced a snap five-day coronavirus lockdown.

While Mr Barton is yet to resign formally, after Ms Bergin recommended his removal, Mr Packer has been quick to take the necessary steps to help reform Crown. At times the billionaire was devastated as he watched the Bergin commission proceedings unfold last year from the South ­Pacific and Mexican coastline aboard his $200m superyacht IJE.

He felt that, through the selective use of emails by counsels assisting the inquiry, he had been unfairly painted as running the company from off the board.

He felt the decision of the Crown directors early last year to knock back a multi-billion-dollar takeover bid from US casino giant Wynn Resorts despite his urging for them to accept the offer was proof they had minds of their own.

It was also the independent directors led by Ms Coonan who earlier last year moved to replace his closest confidant and loyal acolyte John Alexander as executive chairman.

Given the billions of dollars Crown had sunk into capital ­expenditure projects in Melbourne and on new casinos in Perth and Sydney, Mr Packer felt there was no one else who would have driven Crown to invest to make it better like he did, trying to create world-class assets.

He had also never sought to hide from the fact that his threatening emails to private equity Ben Gray revealed by the inquiry were shameful. Mr Packer had stressed in his appearance before the inquiry that he had been diagnosed with ­bipolar syndrome and had been on powerful medication ever since.

Over the summer, as IJE moved into the Caribbean and his ex-wife Erica and their children Indigo, Jackson and Emmanuelle joined him for Christmas, he ­resolved he would fight no more.

On Wednesday CPH announced that its nominee directors at Crown, Guy Jalland and Michael Johnston, would step down immediately. Soon after, a third nominee, John Poynton, resigned his consultancy with CPH so he could ­become an independent director.

It ended the Packer family’s long association with the boards of the public companies it has owned in gaming and before that television and magazines, financial services and e-commerce.

While Mr Johnston’s resignation from Crown board was a fait accompli after negative findings against him by Ms Bergin, the decision of Mr Jalland to resign was surprising given Ms Bergin had supported him remaining as a Crown director.

The move highlighted the change in thinking in Mr Packer’s camp — that protecting CPH’s economic interest in the company had to be considered separately from rehabilitating Crown.

In other words, CPH had to separate itself from Crown.

Late last year Crown had ­already scrapped special agreements with CPH that gave Mr Packer confidential information about its operations and allowed CPH executives to be paid to provide services to Crown.

This move was roundly welcomed by Ms Bergin, and she ­offered Mr Packer an olive branch in her report.

While she recommended ­nobody would be able to own more than 10 per cent of a casino in NSW, Ms Bergin said Mr Packer could apply to the casino regulator for probity approval to maintain his holding.

This meant that the billionaire didn’t have to complete a fire sale of his shares and could bide his time while Crown rehabilitated itself, potentially reaping a greater price for his holding.

NSW Independent Liquor and Gaming Authority chairman ­Philip Crawford also backed Ms Bergin’s reprieve on Mr Packer’s stake, saying he would not seek to “boot” him “off the share register” right away. It led Mr Packer to breathe many quiet sighs of relief this week as he sat on his favourite cream-coloured couch in the living room of the Aspen home he shares with Erica Packer.

His mental illness has also led him at times to wonder to confidants this week if he still has the strength to stay the course with Crown.

In 2006 as a Howard government minister, it was then senator Coonan who changed the media laws allowing Mr Packer to do a $5.5bn deal to restructure his television and magazine interests. Now he has repaid the favour, giving her critical time and space to try to save his Crown jewel.