Ten more held in China hit on Crown Resorts

Ten Chinese organisers of junkets licensed by Crown to bring high rollers here are now believed to be in custody.

Crown Resorts executive chairman James Packer.

China’s crackdown on James Packer’s Crown Resorts has widened, with 10 Chinese organisers of junkets licensed by the casino operator to bring high rollers to its Australian properties now believed to be in custody.

A day after 18 Crown employees in China were detained in lightning raids across the country, police moved on 87 Crown customers, inviting them to “take tea” — or present themselves for questioning.

Ten of them, who are organisers of junkets, were detained and ­remain in custody, The Australian understands.

An industry insider said Crown customers were furious that the company’s database was reportedly in the hands of ­Chinese authorities, following their seizure of the employees’ computers and smartphones during the arrests.

It also emerged yesterday that a Crown executive was warned by a customer based in Shanghai, two weeks before authorities acted, that trouble was brewing. The arrests, in co-ordinated nationwide raids, took place overnight on October 14.

The Crown team had been tracked by authorities for about a year, the insider said.

The surveillance revealed to authorities the amount of money leaving China for gaming tables in Australia, which was the core factor driving the arrests.

The insider said Chinese authorities also knew the details of other casino resort promotion teams in the country, including 12 people working for the Star Entertainment Group, who are believed to have stopped their operations. Most of them are now out of the country, at least temporarily.

While some Chinese junkets are still proceeding in Australia this week, these were arranged before the arrests.

Investors are questioning the outlook for forward bookings with potential customers concerned they too may be targeted by investigators.

It is understood Crown maintains that none of its Australian-based executives was aware of or received any warnings from Chinese authorities before the ­arrests. The company declined to comment yesterday.

Crown’s largest institutional shareholder, Perpetual, revealed last week it had sold more than one-third of its Crown stake.

But substantial shareholder notices lodged by the fund ­manager show it started selling Crown shares in late September and early October at about the $13 mark, before news of the ­arrests.

The selling then accelerated as the share price collapsed last Monday. Crown shares closed 10c higher yesterday at $10.70.

Perpetual’s selling is believed to have been a portfolio risk-management decision.

Perpetual’s funds still hold a combined stake of about 4 per cent in Crown and the fund manager still believes in the wisdom of the group’s demerger of its Australian and Macau businesses and the spin-off of key property assets.

The Crown stake is held by funds run by Perpetual’s head of investments, Paul Skam­vougeras. Recent buying of shares in rival Star Entertainment, which has taken Perpetual’s stake in that company to a 7.1 per cent stake, was by other Perpetual funds.

It is understood that Mr Skamvougeras has not been buying Star shares.

Mr Skamvougeras declined to comment yesterday.

Goldman Sachs revealed yesterday it had become a substantial shareholder in Star, with a 5.6 per cent stake.

The shares of all Australia’s casino operators hit lows on Monday as fresh questions were raised about the impact the Crown arrests on a planned $10 billion outlay on new and upgraded local resorts.

Crown, like other casino ­resorts in Australia and around East Asia, depends substantially on the turnover of high rollers from China.

China bans both gambling and the promotion of gambling, but Crown, like other international resorts, believed it was able to operate, without an office and thus “below the radar”, as long as it adhered to rules limiting its marketing activities.

In February last year, the Public Security Ministry warned of a crackdown. In June last year, 13 South Korean and 34 Chinese employees of Korean casinos were detained over promoting gambling.

A spokeswoman for the ­Department of Foreign Affairs and Trade said yesterday: “The detentions in these cases ­continue in accordance with timeframes allowed by Chinese laws.”

Both consular officials and lawyers for Leezhao, the Shanghai law firm appointed by Crown to act in this case, have visited the three Australians arrested, and lawyers have also visited at last some of the 15 Chinese employees also detained.

“In general terms, Australians detained in China are able to receive and pass messages to their families during visits by either consular personnel or legal representatives,” the DFAT spokeswoman said.