- »Crown Resorts Report to be Handed Down by Bergin
Crown Resorts Report to be Handed Down by Bergin
Crown Resorts is preparing to learn the fate of its casino licence in Sydney this week as a New South Wales inquiry is set to hand down its findings.
Yahoo News reports Patricia Bergin, SC, a retired NSW Supreme Court judge, presided over the extraordinary inquiry which aired allegations that Crown turned a blind eye to money laundering, did business with groups that had organised crime links and had a dysfunctional culture that allowed these problems to fester.
Crown was forced to open its new Sydney tower at Barangaroo in December without the casino, which was to be its centrepiece.
The regulator withheld the licence after the inquiry’s revelations, saying that it needed to see Ms Bergin’s findings before giving the casino the green light.
Ms Bergin’s terms of reference direct her to write and submit a report making findings and recommendations by February 1.
The Independent Liquor and Gaming Authority appointed Ms Bergin to run the inquiry after the media aired scandalous allegations about Crown’s involvement with dodgy junket operators in China.
The other trigger was billionaire James Packer’s sale of one-fifth of Crown to Melco Resorts.
Melco is run by Lawrence Ho, the son of controversial gambling kingpin Stanley Ho, whom the NSW government has forbidden Crown from dealing with.
Ms Bergin’s task was to report on whether Crown’s subsidiary was “suitable” to hold the license for Sydney’s second casino, which it won in 2014 after a hard fought political and public relations battle, spearheaded by Mr Packer.
She has also been looking at whether Crown is able to be a close associate of the licensee.
If Mr Bergin finds Crown does not meet probity requirements, as the barristers assisting her argued she should, she must spell out what would have to happen to make Crown suitable.
During his three-day stand in the virtual witness box, Mr Packer himself suggested Ms Bergin may have to think about caps on shareholding, implicitly acknowledging he may be forced to sell his 36 per cent share in the company.
The former judge will also declare whether the Melco deal was a breach of the licence to run the Barangaroo casino or any other regulatory agreement.
The broad terms of reference allow Ms Bergin to report on “any matter reasonably incidental to these matters.”
At the heart of the inquiry was the towering influence of Mr Packer, who was once executive chairman of the gambling giant and still owns a sizable chunk of the company.
The inquiry, which had strong powers of compulsion, akin to a royal commission, revealed that even after Mr Packer stepped down from the board in 2018, the CEO and board members fed him confidential financial information under a special agreement.
Counsel assisting the inquiry argued he had “extraordinary influence” over the company that was ultimately damaging.
Mr Packer admitted to “shameful” and “disgraceful” conduct while giving evidence, which the barristers argued made him personally unsuitable to be associated with the casino he campaigned to build.
The inquiry also raised questions about the independence of Crown’s board, the effectiveness of its anti-money laundering measures and its embrace of risk.
Crown banking on apartment sales as rating agency drops its score
Crown Resorts is in danger of having to repay millions if credit rating agencies continue to devalue the casino operator.
The Guardian reported in January that Crown would have to pay back $175 million and is banking on selling luxury apartments at its Barangaroo development in Sydney, to reduce its debt load.
Crown is waiting for a final report from the New South Wales government’s inquiry into its affairs, which is due to be handed down by Monday.
In late November, ratings agency Moody’s cut Crown’s score to BAA3, one notch above junk.
It also flagged it might cut it further, because the NSW Independent Liquor and Gaming Authority delayed making a decision on whether Barangaroo’s gaming floors could open until after the inquiry reports back.
A junket or “below investment grade” rating would make it harder and more expensive for Crown to borrow money.
Crown said that Moody’s withdrew from rating $175 million in debt, sold as euro medium-term notes, that Crown has had on its books since before it was spun out of Packer family company Publishing and Broadcasting Limited in 2007.
The notes, which are believed to have been sold to a single Japanese investor, remain rated by two other agencies, Fitch and Standard & Poors, at BBB, which is two notches above junk.