It was a much sharper and more lucid James Packer who took to the stand in the Independent Liquor and Gaming Authority inquiry on Wednesday morning. For a moment there was even the glimpse of a smile.
Spectacles that were nowhere to be seen on Tuesday suddenly made an appearance. The glazed look was gone. And he was far more prepared to provide commentary on the many failings of his Crown Resorts empire, which led to the sensational arrest of its staff in China in October 2016.
Packer accepted he was partly to blame for the failures of ethics, risk management processes and corporate governance at Crown in the period before the arrests, but focused his new-found spirit on taking aim at his chairman and chief executive at the time, Robert Rankin and Rowen Craigie.
In my biography of his life — “The Price of Fortune” — Packer had blamed both for the China arrests. Wednesday’s similar comments were a further iteration of his feelings of being let down by the two executives he put in charge at a time when he was living overseas and focused on other places such as Hollywood and Israel.
But inquiry commissioner Patricia Bergin zeroed in on an important issue for Packer, which has pervaded Crown since the billionaire moved overseas seven years ago after ending his marriage with his second wife Erica.
The Packer influence has been omnipresent at Crown and in the family’s media companies before that for decades, stretching back to James’s father Kerry and his father, Sir Frank. In the years leading up to the China arrests, and following the appointment of Rankin in late 2014, the Packer presence was not what it was.
And, according to the evidence presented, nobody from the management team kept the board informed of the risks of Crown’s high-roller strategy in China that were increasing by the week.
It seemed the cult of the Packer personality within Crown had created a culture where bad news went nowhere. There was no-one who felt it was their role to make sure information flowed through the company and that people were held accountable.
As one close observer noted on Wednesday: “There is no process in a kingdom. When you have an emperor, you have to have a consigliore. And there has been none for some years now.”
Bergin proffered to Packer that his loyalty to Felstead and Johnston, also a Crown director , created a desire for them to please him when he was executive chairman until mid-2015. And until he left the board later that year.
“Possibly,’’ Packer replied, before noting: “I believed I always wanted bad news. I’ve always said there are four stakeholders in the business: governments and regulators, staff, customers and community and shareholders. If you do a good job on the first three, hopefully the shareholders will be rewarded. This is not the culture of the company I was trying to build or that I led for a significant period of time. And for that I am incredibly upset.”
Packer’s focus was always the numbers, which was reflected in his further replies to Bergin. “If you look at our financial budgets and forecasts they never pleased me because we always missed,” he said. “That was right up the top of my list of important things. I don’t think it would be fair to say I was always being pleased by people.”
And therein lies Packer’s problem, as was revealed in the afternoon session of the inquiry. Bergin has previous expressed concern about the degree of control exercised by Packer over Crown after he left the board in March 2018 citing mental health issues, which has raised questions about the company’s corporate governance.
Packer has since been provided with confidential financial information by Crown executives and directors about the casino company’s financial affairs under a special confidential controlling-shareholder protocol approved by the Crown board.
It was struck when his private company, Consolidated Press Holdings, held a 46 per cent stake in Crown. That has fallen to 36 per cent following last year’s sale of shares to Melco Resorts. Emails presented to the inquiry on Wednesday revealed the extent of the information being provided to Packer over the past 2½ years. Some related to cost cutting but many related to numbers. One showed former AFL chief executive and Crown director Andrew Demetriou gave Packer feedback after a board meeting on some of his observations from the meeting, together with explanations from management.
After presenting another email counsel assisting Adam Bell even accused Packer of making threats to Crown’s senior executives. He replied: “No, I was frustrated, I was frustrated because I had been saying for the good part of the financial year that the executives were being too optimistic,’’ before adding: I might have just been being dramatic.”
Bell asked Packer whether he continued to act as though he was in charge of Crown — he then held a shareholding of 46 per cent in the company — by telling executives what to do.
“I expected them to listen to me and push back if they disagreed,’’ Packer replied.
Bell then asked Packer if he was acting as though he was still a director of Crown.
“I was under the impression I could communicate the way I was communicating,’’ he replied.
Packer has been brave in publicly speaking of his battles with mental health issues. On Tuesday he went a step further revealing he had bipolar disorder. But the evidence presented to the inquiry shows a major shareholder still calling the shots. One who, it was shown on Tuesday, blamed his disorder on sending in late 2015 what he agreed were shameful and disgraceful emails that reportedly threatened to put Israeli intelligence unit Mossad on to a Melbourne businessman, speculated to be former TPG executive Ben Gray, when a deal went bad.
The cult of the Packer personality remains very much alive in Crown. And it has become a lightening rod for Bergin, with potentially devastating consequences not only for Packer, but for Crown’s Sydney casino licence.
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