Minority shareholders voice concerns about Crown

By Ethan Anderson Updated
Fitch hands down latest Crown Resorts rating update

Crown Resorts’ minor shareholders are demanding answers about James Packer’s involvement in the business, following evidence presented before a public inquiry into the casino operator.

The Brisbane Times reports the NSW Independent Liquor and Gaming Commission’s inquiry into Crown has over the past fortnight examined the role Mr Packer and officers of his private company, Consolidated Press Holdings, have had in running the company.

The inquiry has examined how CPH executives have contributed to Crown’s failures in risk management and corporate governance that resulted in 19 employees being arrested in China in 2016.

The forging of partnerships with organised crime-linked junket tour operators and a deal to sell a fifth of Crown’s shares to Melco Resorts has also been subject to examination.

Mr Packer, who owns 36 per cent of the shares in Crown, is scheduled to give evidence to the inquiry on Tuesday afternoon.

Overseen by former NSW Supreme Court judge, Patricia Bergin, the inquiry will recommend whether Crown should keep its NSW casino licence.

Shareholder sees room for change

Investors Mutual director Anton Tagliaferro owns about a million Crown shares and said there were clearly issues raised by the inquiry which “have got to be dealt with.”

“The outcome of this inquiry is there has to be changes at Crown; probably changes at board level, changes obviously in compliance,” he said.

“They’ve got to tighten up their probity checking.”

Australian Shareholders Association director Geoff Bowd said the retail investor advocacy group was concerned about governance at Crown in light of the inquiry’s revelations.

“Particularly that which relates to Consolidated Press Holdings’ influence on the Crown Resorts board, specifically pursuing the personal interests of Mr Packer,” Mr Bowd said.

“We are meeting Crown this week as a pre-AGM meeting. This will be on the agenda.”

Crown’s annual general meeting is scheduled for October 22.

Mr Tagliaferro said the greater transparency around what company information Crown shares with Mr Packer was also necessary.

However, he said the influence of a major shareholder was a risk investors took when they bought into a company with a dominant part on the register.

“One assumes those influential shareholders probably have more insight into the company than the smaller minority shareholders,” he said.

Mr Bowd said that Crown had implemented a major improvement in governance in January by replacing its executive chairman John Alexander with an independent chair, former Liberal senator Helen Coonan, who has been on the board for almost nine years.

“We think that the new CEO Ken Barton was forthright at the inquiry, stating that there had been issues which in hindsight would have been managed differently,” Mr Bowd said.

The ASA will consider the testimony of Guy Jalland, a CPH executive and Crown director, when deciding whether to vote for or against his re-election at its October 22 AGM, Mr Bowd said.

Mr Jalland negotiated a deal in May last year for Mr Packer to sell 19.9 per cent of Crown to Hong Kong’s Melco Resorts, which has jeopardised Crown’s licence for its new casino in Barangaroo.

The sale gave Macau casino pioneer Stanley Ho an indirect interest in Crown, which is a direct violation of a term in Crown’s NSW casino licence, banning Mr Ho and a list of associated parties over his alleged links to organised crime.

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