‘Questions’ over suitability of Crown Melbourne boss Xavier Walsh: Jane Halton, Toni Korsanos

Crown directors Jane Halton and Toni Korsanos have expressed concerns over whether Crown Melbourne CEO Xavier Walsh is right for the job.

“I can’t tell you the exact words but think of a three letter acronym,” said Crown Resorts director Jane Halton. Picture: AAP

Crown Resorts directors Jane Halton and Toni Korsanos have told a royal commission into the company they have concerns over whether the CEO of the Crown Melbourne casino, Xavier Walsh, is the right man for the job.

Their doubts come after he failed to fully alert them to the issue of Crown underpaying its state gaming tax, despite knowing about it for years.

The commission was rocked last month when it was revealed Crown could have short-changed the Victorian government by up to hundreds of millions of dollars by incorrectly discussing loyalty benefits like free meals from its pokie revenue for tax purposes.

Mr Walsh told the commission on Monday he had known about the practice since 2018, but did not raise it with Crown chairman Helen Coonan until February and other directors until March.

However, Ms Halton and Ms Korsanos both told the commission on Wednesday that Mr Walsh separately mentioned the tax issue to them as a historical practice that reflected poorly on the company’s culture.

“I did not walk away from that meeting believing that there was a concern that tax had been underpaid,” Ms Korsanos said.

Both directors were shocked when they learned the true extent of the issue in a committee meeting on June 7 through a newspaper article that was sent to them.

“I can’t tell you the exact words but think of a three-letter acronym,” Ms Halton said.

Ms Korsanos said when she appeared later in the day: “Honestly I don’t remember who said what, there may have been some expletives.”

Counsel assisting the commission Penny Neskovcin suggested Mr Walsh’s treatment of the issue showed that a culture of openness being pursued by the Crown board “hasn’t gotten through to Mr Walsh.”

“Do you feel comfortable that Crown Melbourne is in the right hands while Mr Walsh is a CEO and director of Crown Melbourne?” she asked Ms Halton replied.

Ms Halton replied: “So, what I’d say to you is we have a range of issues to manage inside the business. Mr Walsh in my subsequent dealings with him has been quite candid.”

“I would say there are questions here, very definitely, but I have not had the opportunity to talk with him and it wouldn’t have been appropriate for me to talk with him before coming to talk to you all today.”

Later Ms Korsanos gave a similar answer to the same question.

“I haven’t had a good conversation with Mr Walsh about this and I would like to,” she said.

“It does concern me with regard to the (cultural) message we had been putting to the teams.”

Ms Halton also said she was “concerned” that a situation like this could happen, adding that the company’s new CEO Steve McCann would begin evaluating management positions.

“It’s not up to me now on my own – but you’re right – I am sceptical,” she said.

Crown Melbourne CEO Xavier Walsh. Picture: AAP

Ms Korsanos said if Mr Walsh did intentionally misrepresent the issue to her she wouldn’t be comfortable with him remaining CEO.

“If that’s the assumption, if that’s what occurred, I wouldn’t feel comfortable,” she said.

The exact quantum of the underpayment is uncertain. Internal Crown documents indicate the figure could be as high as $272m.

Mr Walsh told the commission it wouldn’t be over $40m and Mr McCann controversially told the Victorian government last week it was around $8.8m, although later walked back this figure in front of the commission as it was based on equivocal legal advice.

Ms Halton and Ms Korsanos also made the case to the commission that a message of a culture of openness was being pressed on the company by the board and was having a positive effect.

Ms Coonan will be given a chance to defend the reform program – and by extension, Crown’s suitability to retain its Victorian casino licence – when she appears at the commission on Thursday, the second last day of the commission’s hearings.

Commissioner Raymond Finkelstein has already expressed doubt over the genuineness of Crown’s reform efforts and on Wednesday expressed his displeasure over tentative plans to enhance oversight by centralising aspects of Crown Melbourne’s functions.

Under Crown Melbourne’s agreement with Victoria, it is legally required to have senior executive managers that reside in the state.

“I suspect that that’s what you want to do, centralising everything. That is, run it from Crown Resorts, not run it from Crown Melbourne,” Mr Finkelstein said.

“And there’s a nice question of whether … you’re allowed to do that as a matter of your agreement with the state of Victoria – and secondly, whether it’s an appropriate thing to do in any event when the regulator has to manage what is happening with Crown Melbourne.”

Elsewhere, Crown Resorts is facing another royal commission in WA.

That probe spent the last two months examining the suitability of the West Australian regulator, the Gaming and Wagering Commission.

It will begin looking at alleged misconduct at Crown’s Perth Casino later this month and is requesting submissions from anyone with knowledge of “improper conduct related to gambling and associated activities at the Crown Casino Perth.”