Crown Resorts Apologises to Investors

Australian Associated Press is an Australian news agency.
October 22, 2020Updated: October 22, 2020

Crown Resorts has apologised to shareholders for governance and risk management failures unearthed by a NSW inquiry, while an investor revolt prompted a director to resign.

“Let me say clearly that I unreservedly apologise for the failings,” chairman Helen Coonan told the gaming and casinos group’s virtual annual general meeting on Oct. 22.

“Having a gaming licence is a privilege that we as an organisation do not take for granted.”

The NSW Independent Liquor and Gaming Authority has been looking into Crown’s fitness to operate a new Sydney casino. Australia’s financial watchdog is investigating possible breaches of anti-money laundering and counter-terrorism laws.

Shareholders cast a protest vote against three directors who stood to be re-elected, and served a “first strike” on pay.

One director, John Horvath, had 31 percent of votes cast against him. He said he would retire.

Horvath acknowledged investors did not support him but for the sizeable vote of Consolidated Press Holdings, owned by James Packer.

Another director, Consolidated Press boss Guy Jalland, called the 41 percent of votes against him “significant and serious.”

“I’m doing everything I can at the Crown board to have the company do better,” Jalland said.

The other director who stood for re-election, ANZ Bank director Jane Halton, had 24 percent of votes against her. She joined Crown in 2018.

The executives’ remuneration report attracted a 34 percent protest vote.

The result does not stop payments, but puts pressure on directors to retain their jobs next year.

Under the `two strikes’ rule, if more than 25 percent of shareholders vote against two consecutive remuneration reports, it triggers a board spill.

Chair Helen Coonan and directors faced critical questions from shareholders.

Some worried the NSW inquiry may lead to Crown being stripped of its Sydney casino licence.

Crown has a 99-year lease on the site and Coonan said she was confident Crown could deal with any eventuality.

Crown this year appointed her as non-executive chair and Ken Barton as its first CEO.

Executive chair John Alexander will retire in January.

On Wednesday, Crown severed a services agreement with Packer’s Consolidated Press and a controlling shareholder protocol.

Both arrangements allowed the billionaire, who holds 36.8 percent of Crown through his private company, access to information not available to other investors.

Critics argued the arrangements blurred the lines between the board and management of the companies, particularly after Packer stepped down as a Crown board director in 2018.

“CPH remains a significant shareholder, and I appreciate that this relationship needs to be appropriately managed,” Coonan said.

“I want to assure our various stakeholders that we are listening and changes will be made.”

Earlier this month, Packer appeared before the NSW inquiry.

He agreed that after leaving the board he continued to communicate with directors and management on issues such as asset sales and cost-cutting.

The billionaire indicated he may sell down his voting shares.

Earlier this week, AUSTRAC began investigating possible breaches of anti-money laundering and counter-terrorism laws.

The NSW inquiry was triggered by media reports last year accusing Crown of doing business with casino “junket” operators who had not been vetted for organised crime links.

Shares were up 2.39 percent to $8.58 at 1550 AEDT.