Crown loses directors as post-Bergin shakeout begins

01-10-2020 |  

Heads have begun to roll at Crown Resorts, a day after a bombshell report found it was unsuitable to hold a Sydney license, with regulators warning the company will need to “blow itself up” to regain suitability.

Less than 24-hours after former Judge Patricia Bergin delivered her findings, Crown Resorts announced that directors Guy Jalland and Michael Johnston had stepped down. It also said that major shareholder, Consolidated Press Holdings, no longer has any representation on its board.

That’s after James Packer’s private company terminated its private consultancy accord with Poynton, who is a non-executive director at Crown.

Bergin warned that to convince regulators of its suitability to hold a license for its new $2.2 billion property at Barangaroo in Sydney, Crown would need to purge its board and face a regulatory deep dive into its accounts and management practices.

However, regulators went one step further. Speaking to the media, NSW Independent Liquor and Gaming Authority Chair Philip Crawford said that headlines reporting that Crown will need to “blow itself up to save itself” are not “far wide of the mark.”

“It needs a lot of change. A lot of the concern we have is around the links to organized crime. I think Bergin’s terminology was that Crown had been infiltrated by organized crime,” he said. “For any regulator or any government, they are pretty scary terms.”

Crown chairman Helen Coonan on Thursday released a statement welcoming the report and Crawford for his constructive comments.

“The Commissioner has made findings of serious conduct, culture and compliance issues that clearly do not accord with our values. I accept criticism is warranted and reiterate our unreserved apologies for these shortcomings.”

“While we have already taken a number of important steps to improve our governance, compliance, and culture, I recognize from the Commissioner’s report we have much more to do.“We do not underestimate the scale of the problem and appreciate there is a need for ‘root and branch’ change. This change has commenced.”

The regulator may begin talks with Coonan as early as Wednesday, Crawford said.

The report has cast doubt over the future of Australia’s biggest casino operator, with regulators in other states now probing its business.

Victorian Gaming Minister Melissa Horne said in December that she was fast-tracking the regular review of its suitability to hold a casino license and appointing a special commissioner to oversee the process.

“This review is needed given the evidence we’ve seen come out of the NSW inquiry,” she said. The review was to have taken place in 2023.

The Victorian Commission for Liquor and Gambling has come under criticism that it has been slow to react to allegations aired in an investigative report by The Age, The Sydney Morning Herald and 60 Minutes, with many of the accusations related to Crown’s flagship property in Melbourne.

Source: AGBrief