Crown Resorts resists call to slash James Packer’s voting power

Crown Resorts is resisting a big call against James Packer, saying it isn’t necessary now the relationship between the two is ‘stock standard’.

James Packer is no longer a director of Crown but he has big voting power, with a 36 per cent stake.

Crown Resorts is resisting a call to slash the voting power of its biggest shareholder James Packer to just 10 per cent, arguing it is not necessary after recent changes.

The NSW Independent Liquor and Gaming Authority continues to hear closing submissions for its inquiry to determine whether Crown is fit to hold the gaming licence for its new $2 billion plus development on Sydney’s Barangaroo waterfront, but it has already decided the opening slated for next month should be delayed.

That came after a last-minute revelation from Crown on Wednesday that two independent reports had concluded “cuckoo smurfing” – a form of money laundering where large transactions are split into small transactions in a bid to disguise them – could be seen in the bank accounts of two of its subsidiaries.

On Thursday, Crown’s barrister Neil Young continued to argue the company had made necessary improvements in light of the serious problems the inquiry had shone light on, including ongoing board renewal, so the imposition of further measures was not warranted.

Counsel assisting the inquiry has suggested Mr Packer’s Consolidated Press Holdings should only be allowed to exercise a voting power of 10 per cent despite having a 36 per cent stake in Crown.

Crown’s tower at Barangaroo is Sydney’s tallest building. Picture: Richard Dobson

Mr Young said there has been no evidence before the inquiry that CPH had used or intended to use its voting power inappropriately, so such a move was not necessary.

“Secondly there are practical and legal problems with the proposal,” he said.

Crown could not legally prohibit CPH from exercising its full voting power and that was, in any event, against ASX listing rules, although a waiver could be obtained.

There were significant protest votes against re-electing three directors at Crown’s annual general meeting last month, but they were saved by CPH votes.

Counsel assisting has also suggested cutting CHP’s nominees on the board from three currently down to one.

Mr Young said the board had more than 10 members so such a move “won’t materially alter” CPH’s ability to influence decision-making, which was largely made by independent directors, or affect the flow of information to the board.

The inquiry has heard most of Crown’s directors were hand-picked by Mr Packer.

It has been suggested he was the driving force behind the company’s push to secure more of the Asian high roller “junket” gambling market – which is at the centre of the money laundering allegations – and Crown admits he was given privileged information through a controlling shareholder protocol agreement, which was recently terminated.

Mr Young reiterated his submission on Wednesday that Crown’s relationship with the reclusive billionaire would from now on be no different to any other listed company’s relationship with its biggest investor.

“Crown’s relationship with CPH has been pulled back so that the position is the stock-standard relationship between a company and its major shareholder,” he said.

“There is only the appropriate board representation and that is the conduit for influence and communications.”

Gaming at Crown’s Barangaroo development is on hold but other aspects of the operation, including restaurants, may be allowed to open next month. Picture: Lisa Maree Williams/Getty Images

Counsel assisting has argued Mr Packer should have no association with the Barangaroo casino at all due to prior poor behaviour.

Mr Packer has admitted to threatening a businessman over a deal in 2015, and acknowledged the behaviour was “shameful” and “disgraceful”, but blames it on his bipolar disorder.

Mr Young also remarked that other casinos, including rival Star Entertainment, had been dealing with the same junket operators as Crown but said he wasn’t calling for findings against them.

The inquiry heard that in August 2019, Star closed its room set aside for Macau’s largest junket operator Suncity, run by Alvin Chau, who has been blocked from entering Australia due to his suspected links to organised crime.

However, Star executive Greg Hawkins previously testified at the inquiry that the company was still dealing with a junket operator funded by Mr Chau.

While Mr Young said Crown had already made “practical concrete changes” to its governance structures to ensure all gaming operations were compliant with anti-money laundering laws, ILGA chair Philip Crawford said revoking the Barangaroo licence was an option on the table.

“Crown is committed to doing the right thing,” Mr Young said.

“We have acknowledged mistakes and failings, and we have acknowledged that matters should have been escalated to risk management committees and the board.”