(ATF) The boardroom of one of Australia’s biggest gambling groups is continuing to empty out after the company, Crown Resorts, was declared unsuitable to hold a casino licence.
On February 15, chief executive Ken Barton became the latest executive to resign after a state-mandated public inquiry last week recommended Crown Resorts be denied a licence to run a new casino that dominates Sydney’s skyline.
The reason, according to the New South Wales (NSW) Independent Liquor and Gaming Authority, was the company’s alleged failure to address allegations of money laundering and links to organised crime.
Barton follows three directors out the door in the wake of the scathing report into the firm, which was long run by media scion and billionaire James Packer. Two of the departed directors represented Packer’s holding firm, Consolidated Press Holdings or CPH, which has about 35% of Crown shares.
The authority commissioned the inquiry after media reports that existing Crown casinos in Australia were used to launder profits from human trafficking, drugs, child sexual exploitation and terrorism.
Former NSW Supreme Court judge Patricia Bergin said Crown was “not suitable” for a licence and had been “facilitating money laundering” and doing business with groups linked to Chinese triads and other organised crime gangs.
A company lawyer had told the inquiry that illicit funds were probably laundered through two “high roller” accounts at the company’s resorts in Perth and Melbourne.
Bergin said the company had “poor corporate governance, deficient risk management … and a poor corporate culture”. She recommended a series of reforms before the casino at the gleaming 75-storey tower on Sydney’s waterfront could open.
Company chair and former Australian government minister Helen Coonan will lead the search for a new CEO. She said she accepted the findings and said steps were being taken to improve the company’s governance, compliance and culture but there was “much more to do”.
“The very serious problems of the infiltration of Crown subsidiaries’ accounts by organised criminals should send a shiver down the spine not only of any casino regulator but also the community generally,” Bergin’s report said.
PATH TO SALVATION
The former judge’s recommendations potentially opens a path for Crown to salvage its flagship Sydney casino, which commands sweeping views of the harbour. Bergin urged an overhaul of the company’s board, noting that regulators would retain “serious doubts” about three directors criticised in the report – Barton, Michael Johnston and Andrew Demetriou.
Shares in Crown, in which US private equity giant Blackstone holds a 10% stake, edged up about 0.6% to A$9.95 on February 15. Trading was suspended on February and the stock fell as much as 8.9% the next day when trading resumed, before closing down a little over 3%.
A shell company is believed to have been a vehicle for international criminal organisations to launder money at Crown Perth from at least 2014. The company, Riverbank Investments, is owned by Crown Resorts and Barton is its sole director.
With reporting by Agence France-Presse