James Packer was Andrew Demetriou’s top priority, Crown inquiry hears

Former AFL chief Andrew Demetriou’s independence as a director has been questioned in the light of special treatment of James Packer.

Commissioner Patricia Bergin hearing testimony at the NSW gamin inquiry. Picture: Supplied

The Crown Resorts board has been further shaken by the testimony from three independent directors, pointing to the outsize influence of gaming mogul James Packer even after his departure from the company, in damaging evidence to the NSW independent liquor and gaming authority’s inquiry into the suitability of Crown holding a casino license in the state.

The latest day of evidence was marked by Commissioner Patricia Bergin’s apparent displeasure with former AFL tsar Andrew Demetriou for using notes while giving testimony on Monday, though he denied reading out answers from them.

Further evidence by independent directors, former Aristocrat chief financial officer Antonia Korsanos and Kerry Packer’s one time doctor, professor John Horvath, highlighted the flow of information to Packer’s private CPH ahead of the proposed sale of a 20 per cent stake to Hong Kong’s Melco Resorts.

But the evidence revealed that Crown chairman Helen Coonan had put a halt on providing further information to CPH under a special protocol and that further board changes were planned.

Dr Horvath also told the inquiry that he had lost confidence in senior Crown executive, Barry Felstead, chief executive of the company’s Australian resorts unit since 2013, in the wake of how information about risks to the company’s China operations were handled. But he supported fellow Crown director Michael Johnston, with whom Mr Felstead shared his concerns, who is also an executive at CPH.

In a combative morning session, the loyalties of the high-profile Mr Demetriou were called into question, as emails were produced showing he told controlling shareholder Mr Packer that serving his best interests was among his top priorities.

Appearing to give evidence for a second consecutive day, Mr Demetriou was presented with an email exchange between himself and Mr Packer from April 2019, around the time the company was considering a later abandoned takeover offer from US gaming giant Wynn.

In the exchange Mr Packer, who at the time was merely a shareholder of Crown through his private company CPH, told Mr Demetriou that he intended to accept an offer from Wynn for his 46 per cent stake as Crown’s business was “going backwards.”

The mogul flagged a clean out of the casino’s senior ranks if the deal was consummated.

“We have to get rid of all the senior management, including JA, if we have to stand alone, and I don’t want to have to do that,” Mr Packer said in reference to John Alexander, who was chair of Crown Resorts at the time.

Counsel assisting Scott Aspinall asked Mr Demetriou if he thought Mr Packer, as controlling shareholder, had the power to remove senior management if he so desired.

“No, I didn’t accept that,” Mr Demetriou replied. “The decision for the senior management, the CEO in particular is a decision for the board.”

But Mr Aspinall raised a subsequent message Mr Demetriou said he had “absolute confidence” that the board would consider “all” and “make the right call” after hearing a presentation from CPH executive Guy Jalland.

“And that was because you took Mr Packer and Mr Jalland’s view of what should happen with Crown very seriously, didn’t you?” Mr Aspinall asked Mr Demetriou.

“I took their views as views they were expressing,” Mr Demetriou replied. “I took the Wynn overtures very seriously for Crown to consider.”

During his testimony on Monday Mr Demetriou had defended an arrangement by which Mr Packer received company information ahead of other shareholders because he considered Mr Packer “something of a visionary”.

Mr Aspinall on Tuesday then read another email from Mr Demetriou to Mr Packer where Mr Demtriou said “I remain committed to serving the best interests of Crown, and most importantly, you.”

“Mr Demetriou, how can such a statement be consistent with you claiming to be an independent director of Crown?” Mr Aspinall asked.

“I think it’s absolutely consistent, I say ‘I remain committed to serving the best interests of Crown and most importantly, you,’ but I don’t say and ‘more importantly you.’”

Mr Demetriou added he gave the assurance to Mr Packer for “no particular reason” although he agreed with Commissioner Bergin’s view that it could look to a reasonable person to be an expression of loyalty to Mr Packer over other shareholders.

Mr Demetriou was on Monday caught glancing at notes not tabled to the inquiry and clips of his appearance were played. The commissioner said that if the untabled notes had not been discovered, she would have been misled by Mr Demetriou.

“Oh Mr Demetriou, why did you do it?” she asked rhetorically.

Ms Korsanos told the inquiry that recommendations made by accounting firm Deloitte after a review of the company’s practices were being put in place. The commissioner noted the company had suspended all junket operators to June 2021 but said Crown’s putting place new procedures looked to be rushed ahead of the December opening of Crown Barangaroo.