Adam Bell, counsel assisting the Bergin inquiry, didn’t waste time cutting to the chase on Wednesday morning as he declared that the influence of Packer and his private investment vehicle Consolidated Press Holdings had a “deleterious impact on the good governance of Crown”.
Then came Bell’s killer line: “We submit the evidence presented to this inquiry demonstrates that the licensee is not a suitable person to continue to give effect to the licence and that Crown Resorts is not a suitable person to be a close associate of the licensee.”
Bell is only making recommendations and it will be up to inquiry head Patricia Bergin to make her own findings about Crown’s suitability.
More importantly, she must also report on what corrective action Crown needs to take to make itself suitable if she accepts Bell’s submission to make a finding of unsuitability.
This is where things get interesting inside Crown because, on the face of it, the board now has damning evidence of the disastrous consequences of Packer’s ongoing pervading influence in the company’s affairs.
Perpetual, Crown’s biggest institutional investor, has been privately questioning the influence of Packer over the Crown board through his CPH nominee directors for at least the past year.
CPH chief executive Guy Jalland only retained his directorship at the annual meeting when Packer voted his stake to support him, suffering the biggest backlash vote against a director in Crown’s history.
CPH finance boss Michael Johnston, who has served as a Crown director for over a decade, has also come under heavy fire at the inquiry. Bell declared on Wednesday that Johnston’s evidence regarding the China arrests saga was “not credible”.
Crown chair Helen Coonan has already taken one piece of decisive action in terminating a services agreement with CPH and a controlling shareholder protocol mechanism, both of which allowed Packer to receive confidential information about Crown since he resigned as a director in 2018.
But does Coonan now go further and demand the resignations of Jalland and Johnston to head off Bergin’s findings?
Do Crown’s independent directors push for Jalland and Johnston to go, especially the most recent and arguably least tainted appointees, Jane Halton and Toni Korsanos?
And what about CPH’s third nominee director, Crown Perth chairman John Poynton? Should he also go? Or should he remain on the board and recast himself as an independent director, given he has nothing like the historic and current association Jalland and Johnston have with Packer?
Like Halton and Korsanos, Poynton is also a relatively recent appointee to the board.
But if Coonan and Crown’s independent directors believe the CPH directors should resign, what if they refuse to do so? What if Packer digs in and says he wants them to remain until they are forced off?
These are the internal politics Coonan must navigate in the weeks ahead. On Thursday she will hear counsel assisting’s likely damning recommendations flowing from Crown’s dealings with junket partners with links to organised crime, which also facilitated and enabled money laundering at its Melbourne casino.
The other big headache for Coonan remains the timing of the Sydney opening, which is now clearly exercising NSW Premier Gladys Berejiklian.
Coonan told the inquiry that the December 14 opening date — before Bergin’s report is due on February 1 — was not necessarily in Crown’s hands given timings associated with the development of the Barangaroo precinct.
She also might argue that if Crown’s processes are so rotten to the core, why is the West Australian gaming regulator allowing Crown Perth to trade, as it has been for several months?
But that logic will fall on deaf ears if political pressure mounts on Crown to delay the opening over the next six weeks. A new date and the resignations of Jalland and Johnston could yet be critical circuit breakers for Coonan.
More Coverage
Retail’s Mr Fix-it gets ready for his next rescue mission
From his family’s deep ties with David Jones to turning around Country Road and General Pants, Sacha Laing reckons he has the right recipe to resurrect Adore Beauty.
ASIC wades into WiseTech affair
Chair Joe Longo has told a conference it’s troubling that personal lives are having an effect on public confidence in corporate governance.
It has taken nearly 50 days of evidence but now we finally have it in writing: James Packer and Crown Resorts are “unsuitable” to hold a Sydney casino licence.