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Damon Kitney

NSW casino inquiry: Will James Packer sacrifice himself for Crown Resorts licence?

Damon Kitney
Commissioner Bergin expressed serious concern about the degree of control exercised by James Packer over Crown.
Commissioner Bergin expressed serious concern about the degree of control exercised by James Packer over Crown.

It was the moment close watchers of Patricia Bergin’s inquiry into James Packer’s Crown Resorts had been waiting for.

The full and frank exchange on Thursday afternoon between Bergin and Packer at the conclusion of the billionaire’s evidence to the inquiry was intense, forensic and revelatory.

It even prompted Packer, lathered in sweat and looking and sounding weary after another marathon three-hour interrogation about his involvement with controversial junket operators, to crack a joke.

“I think you are underselling yourself,’’ Packer said with a wide smile to Bergin when she mused about the failures over decades to bring about more co-operation between casinos, regulators and law enforcement bodies, to which she replied with a wry smile that she was not known for the trait.

“I think your recommendations are going to be listened to very carefully.”

But when it came to the serious matters of Crown’s governance and how it can salvage its Sydney casino licence from the wreck of this inquiry, Packer was seemingly prepared to sacrifice himself.

“I think there certainly shouldn’t be major shareholder provisions going forward,’’ the billionaire stated in a monotone voice about the controversial controlling shareholder protocol put in place after he left the Crown board in March 2018 citing mental health issues.

“The Crown board has a lot to think about in terms of who the right people are for the right jobs. I think caps on shareholders may be something that you will think about. I think this has been a terribly painful and terribly shocking experience for the board. As it has been for me. I won’t be going on the board again. I think the board will be more independent than it was in the past.”

Under the protocol Packer has since been provided with confidential information by Crown executives and directors about the casino company’s financial affairs.

It has led Bergin to express serious concern about the degree of control exercised by Packer over Crown, especially given it was struck when his private company, Consolidated Press Holdings, held a 46 per cent stake in Crown. That has now fallen to 36 per cent following last year’s sale of shares to Melco Resorts, which were subsequently sold to private equity giant Blackstone.

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

On Thursday they detailed how much he had been kept informed by his so-called personal assistant Ishan Ratnam about the company’s dealings with controversial junket operators in the years he was on the board and then when he was off it.

Packer denied he had any knowledge of the alleged organised crime links of some of the operators Crown dealt with — notably the controversial Suncity junket — but admitted he been on notice of the allegations for many years.

He also agreed when he was executive chairman of Crown up until mid-2016 the board set no guidance with respect to its risk appetite for junkets and admitted he had not turned his mind to the threat of money laundering risks of junkets.

But back to the powerful exchange with Bergin. Packer was also asked if he accepted that he led the company with a “powerful personality” up till end of 2015 when he first resigned as a director.

“I accept that,’’ he said.

After resisting the suggestion on Wednesday, he also accepted that because of that commanding presence, there were people in the management ranks always wanting to please him.

“I had never thought about it before than two days ago. Perhaps you are right,’’ he told Bergin.

She also returned to the arrests of Crown’s staff in China in October 2016 and the failure of the board to be informed about the dangers on the ground in China for the company’s staff that were increasing by the day as the government directed a major crackdown on foreign casino operators.

Bergin questioned how some Crown directors such as then chairman Robert Rankin, CEO Rowen Craigie and Michael Johnston — who were informed about the events in China — did not tell their colleagues. Instead they only informed Packer. Again the cult of his personality came to the fore.

“It was never my intention to stop information getting to the board,’’ Packer said, which Bergin agreed.

Packer also conceded a point from Bergin that Johnston’s role on the Crown board — as the finance controller of Packer’s private company CPH — represented a conflict.

“With hindsight I do,’’ he said.

She was also crystal clear that there were two key questions before her in the inquiry. One was whether Crown and its close associates were suitable to retain the Sydney casino licence.

The other is that if a finding is made or a recommendation is made to the NSW gaming regulator that finds what she termed “unsuitability”, how does Crown make its operations suitable?

She suggested to Packer that some very serious changes needed be made.

His response was crystal clear: “Absolutely.”

Read related topics:James Packer
Damon Kitney
Damon KitneyColumnist

Damon Kitney has spent three decades in financial journalism, including 16 years at The Australian Financial Review and 12 years as Victorian business editor at The Australian. He specialises in writing the untold personal stories of the nation's richest and most private people and now has his own writing and advisory business, DMK Publishing. He has published three books, The Price of Fortune: The Untold Story of being James Packer; The Inner Sanctum, and The Fortune Tellers.

Original URL: https://www.theaustralian.com.au/business/leadership/nsw-casino-inquiry-will-james-packer-sacrifice-himself-for-crown-resorts-licence/news-story/d530604ba25cf5d027d16c5e14286066