An inquiry by the New South Wales (NSW) Independent Gaming and Liquor Authority has heard that billionaire casino owner James Packer overruled objections to a sale that now ties Crown to a Chinese company that has been cited in other gaming regulators’ reports as having links to organised crime.
Michael Johnston, a director of two of Packer’s companies, Crown Resorts and Consolidated Press Holdings (CPH), told the inquiry that the $1.7 billion sale of a 19.9 percent stake in Crown to Lawrence Ho's Melco Resorts was not well-considered and Packer overrode any objections.
“With the benefit of hindsight, I think that perhaps we should have looked more deeply,” Johnston, a key negotiator of the sale, admitted.
Johnston said that Packer didn't listen to his concerns but instead wrote in a text message: "Mike, it’s my life and I am going to overrule you."
The inquiry is investigating whether Crown breached its license given that Melco Resorts has a parent company owned by Stanley Ho—a Chinese gambling billionaire who was involved in organised crimes before his death in May.
Australian casino and gaming authorities have banned companies owned or part-owned by Stanely Ho from purchasing stakes in casinos in an attempt to halt the spread of organised criminal activities.
It is alleged that CPH did not inform the NSW gaming regulator of the sale until Packer had already completed the deal because the company was aware that Stanley Ho’s companies were barred from owning shares in Crown's casinos under their gaming license.
Melco Resorts is owned by Stanley Ho's son, Lawrence Ho, a Hong Kong–Canadian entrepreneur.
While there have never been allegations of criminal activities surrounding Lawrence Ho, Great Respect—the parent company owned by Stanley Ho—maintains a substantial stake in Melco Resorts and is on NSW’s blacklist.
James Packer is due to front the inquiry on Oct. 6.