James Packer execs to lose Crown role

Crown Resorts director Harold Mitchell has revealed James Packer’s executives will no longer perform services for the gaming company.

Harold Mitchell giving evidence to the NSW gaming inquiry via video link.

Crown Resorts director and advertising doyen Harold Mitchell has revealed James Packer’s executives will no longer perform services for the gaming company in the future, a day after its billionaire shareholder revealed he was prepared to sell down his interests to ensure Crown retained its coveted Sydney casino licence.

Appearing on Friday before a public inquiry into Crown considering its suitability to retain the licence, its second longest-serving independent director acknowledged the deep concerns expressed by the inquiry Commissioner Patricia Bergin about the conflicts of interest inherent within Crown’s structure, which she believed had crippled its governance in recent years.

While Mr Mitchell said he was supportive of an agreement for executives from Mr Packer’s private company Consolidated Press Holdings (CPH), to provide services to Crown when it came into force during 2016, he admitted that “into the future there is every chance that all those jobs will be done inside Crown.”

“There is no doubt ultimately that will happen,’’ he said.

On Thursday in an extraordinary acknowledgment at the conclusion of three days testimony via video link from his $200m super yacht, Mr Packer signalled he was prepared to reduce his ties to Crown in the wake of devastating evidence presented to the inquiry about multiple failures of risk management, compliance and governance at the company.

Ms Bergin, a former NSW Supreme Court judge, could force Mr Packer to sell down his 36 per cent shareholding in Crown to a passive position if she finds he is not a fit and proper person to be an associate of the Sydney casino licensee company.

Crown could also lose the licence if it fails the same test. The Barangaroo casino is scheduled to open in mid-December, ahead of the expected release of Ms Bergin’s report in February.

Mr Packer admitted he would also be prepared to scrap a special deal that has given him access to Crown’s confidential information since he resigned as director in 2018 for mental health reasons.

A string of emails presented to the inquiry on Wednesday and on Thursday morning revealed the extent of the information being provided to Packer by Crown executives and directors over the past two and a half years.

But in his evidence Mr Mitchell, who is now chairman of Crown’s remuneration and nomination committee, defended the agreement because it allowed the information to be transferred in a “formalised” manner.

The inquiry has heard damning evidence of Crown’s dealings in recent years, with controversial offshore junket operators that bring high rollers to gamble in its Australian casinos, some of whom have been shown to have connections to organised crime and engaged in money laundering.

Mr Mitchell said he was not specifically aware of the details of junket operators and up until recently only had a vague understanding of what exactly they did.

“I think for some time I heard the word, and I hope that I never hear it again,’’ he said, admitting Crown’s procedures for vetting junkets were “not good enough” and that the company should have never dealt with high rollers with criminal records.

Mr Mitchell was also asked about his knowledge of Crown’s activities in China prior to the arrest of 19 Crown employees in October 2016, for allegedly illegally promoting gambling.

When he first joined the board he said he only saw Crown’s involvement in China as a “minor” part of the business and although he realised it grew in significance over time, he did not know that Crown had staff in the country either directly or indirectly until after their arrest.

Like Mr Packer, he claimed he was not aware of a long trail of media reports capturing the Chinese government’s growing hostility towards foreign companies promoting gambling in the country, despite Crown being listed in many as a company involved in this activity.

Mr Mitchell described the event as “shocking” and “terrible” and said he made inquiries as to how it could have happened but learnt “very little”, and didn’t know if anything was being kept from him at the time.

He also revealed he took no action when two Crown bank accounts — Southbank Investments and Riverbank Investments — were the subject of media reports last year over their links to money laundering activity, as he “believed it was being handled by all the executives.”

He could not remember issues with the accounts ever being raised at board level.

Under questioning from Counsel assisting Scott Aspinall, Mr Mitchell told the inquiry that at the time of his appointment as a director in 2011 — which occurred simply after Mr Packer called him and asked him to join the board — he received no induction or anti-money laundering (AML) training, despite having no particular expertise in the gaming industry.

He said that “more recently” AML training had been introduced for board members, but that it only takes half an hour to an hour to complete “if you’re slow”.

“I think it would help, I’d have to say,” Mr Mitchell added when asked if he thought that board members should receive mandatory training on AML and gaming regulatory practices into the future.

Mr Mitchell was also questioned by Ms Bergin on Crown’s agreement with the NSW government underpinning its Barangaroo’s casino license, which contains a clause prohibiting Crown from dealing with the late controversial Macau casino magnate Stanley Ho.

It was revealed Mr Mitchell sent a message of congratulations to Mr Packer on May 30 last year, the day the billionaire announced his intention to sell half of his Crown shares to Lawrence Ho’s Melco Resorts Group, which has been shown to have had links to Mr Ho’s father Stanley.

“Fantastic! I always thought that was a good idea!”, the message read.

Ms Bergin said Crown had given very serious undertakings to the NSW government and she suggested the company “did not keep that in the forefront of its mind.”

“In my case, I hadn’t either,” Mr Mitchell agreed.

He defended his decision to remain on the board of Crown after a court ruling earlier this year that he breached his duties as a director of Tennis Australia in 2012 during the negotiation of television rights with the Kerry Stokes-controlled Seven Network.

“The answer is, I have given consideration, and determined that I should stay on the board of Crown,” Mr Mitchell said, adding that most of the charges levied at him by the corporate regulator were thrown out and the judge was yet to decide on a penalty.

“I’ll wait to see where the further matter of that goes when the matter is completed.”

He also defended his independence as a Crown director and the length of his tenure on the board, after being questioned about a $1.9m interest-free loan he received from James Packer’s father Kerry during the early 1990s recession that saved him from bankruptcy.