NSW inquiry: ‘My execs let me down’, says James Packer

James Packer has launched a strident defence of his culpability regarding the arrest three years ago of 19 of his Crown employees in mainland China.

James Packer on his second day of testifying via video link before the Crown casino inquiry.

James Packer has launched a strident defence of his culpability regarding the arrest three years ago of 19 of his Crown employees in mainland China.

Accepting counsel assisting Adam Bell’s view that Crown’s failure to prevent the event occurring constituted a failure of the company’s corporate governance, Mr Packer managed to shift the ultimate blame onto senior Crown executives.

Mr Bell began Wednesday‘s session by drawing Mr Packer’s attention to the fact that former CEO Rowen Craigie knew that the legality of Crown’s operations in China — the procurement of high net worth customers — was based around “two precise questions of Chinese law”.

Mr Packer said he was never told about this issue, and that the issue of monitoring sovereign risk in China was entrusted to Mr Craigie and former Crown chair Robert Rankin.

“I believe Mr Rankin and Mr Craigie let me down,” Mr Packer told the casino inquiry.

When confronted with evidence that current Australian resorts boss Barry Felstead knew Crown staff in China were concerned for their safety, Mr Packer denied he was told about it.

Mr Packer also denied that other executives shared with him any information or concerns they had about the riskiness of their Chinese operation, saying it ­became obvious to him only when the Korean government began to crack down on casino operators in June 2015.

Mr Packer said he was also not aware of numerous gaming industry news articles covering the Chinese’s government’s intention to crack down on junket operators from as early as February 2015, telling Mr Bell he believed he had a media-monitoring service.

Also apparently not within Mr Packer’s realm of knowledge was that Crown’s man in China, Michael Chen, was receiving independent legal advice on how to receive foreign work visas for Crown’s Chinese staff to reduce their risk of detention by Chinese authorities.

The blame was levied once more on Mr Craigie.

“I believed Mr Craigie should have been on top of this information and should have brought it to the risk management committee, to the board and to myself — I don’t know how he could not have been aware of this if he was doing his job,” Mr Packer said.

After it was revealed that three executives — Barry Felstead, Michael Johnston and Ishan Ratnam — all knew that a Crown employee in China was questioned ­by police in Wuhan — but that they apparently failed to inform Mr Packer — Mr Bell asked him whether he agreed that this was “extraordinary”.

“I don’t know if it’s extraordinary; it’s incredibly disappointing,” Mr Packer said.

Commissioner Patricia Bergin asked Mr Packer if he would have acted if he had known about the risks to his staff.

“Absolutely, madam commissioner,” Mr Packer replied.

“I would have taken a conservative approach with the best advice we could get — and I would have spoken to Mr Rankin, who was China expert, um, but there is no way we would — the VIP businesses is not a huge part of profitability of the overall business, as I know you understand that commissioner,” he said.

“To put ourselves at risk on so many fronts for 7 per cent of our profit — I know that was a number that was used last week … just makes no sense.

“But this was not the culture of the company I was trying to build … and this was not the culture I ­believe existed to a significant extent. And for that I am incredibly upset.”

However, Mr Packer did concede to Mr Bell that all of this evidence demonstrated a failure in Crown’s ethics, risk management and corporate governance.

But when asked if he accepted responsibility for that failure, Mr Packer said: “I accept some — not all, but some.”