Regulators must not cut Packer more slack over casino responsibilities

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After being shown emails, he then admitted that he made threats against a private equity executive who was involved in a failed plan to take the company private. The details of the threat were suppressed by the inquiry but the email referred to someone with links to Mossad, the Israeli secret service. The banker took them seriously enough to seek security advice.

Mr Packer himself said his behaviour in sending the threat was “disgraceful” but told the hearing his actions were affected by his bipolar disease. He said he should have made a public announcement about his mental problems when he resigned as chairman in August 2015 and remained on the board.

Mr Packer was then asked at length about the arrest soon after of 19 Crown staff, who were working in China in breach of a ban on the marketing of gambling, and about Crown’s close ties to junket operators such as Alvin Chau Cheok Wa, who was banned from coming to Australia last year because of his links to organised crime.

Although he blamed Crown staff for keeping him in the dark, Mr Packer said he had heard rumours about these problems as well as admitting he was the “driving force” behind the partnerships with junket operators. Even after he left the board, he said he had access to confidential information about the company’s operations and he pushed Crown staff to meet highly ambitious budget targets. Several Crown directors were also directors of his private company, creating potential conflicts of interest.

Mr Packer agreed he had underestimated the importance of dealing with people of good reputation.

The inquiry is due to report in February but it faces a daunting task in deciding what can be done to clean up the mess at Crown. The timing is one problem, with its new Sydney Casino due to open in December. Ms Bergin could recommend cancelling Crown’s licence or imposing other conditions which would impact its operations significantly.

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On Friday, Mr Packer all but accepted that he cannot, and should not, be allowed to continue as a dominant shareholder in the company. He suggested ownership limits should be imposed on large investors and he could sell some of his stake in the company. He also backed mandating a higher share of truly independent directors, ending the indirect control he exercised as a controlling shareholder.

Yet it is not clear whether NSW and Victoria can impose new conditions on Crown without triggering compensation under ill-judged indemnity clauses, agreed to by both the Victoria and NSW governments when granting the company its casino licences.

At the very least, if Crown wants to keep its licence, its existing management must be replaced and it must accept much more rigorous and intrusive regulation.

Mr Packer claimed the experience at Crown had been “terribly painful”. Yet if he thinks he deserves sympathy, it only shows his unfitness to be involved at Crown.

He gained financially by what is, at best, indifference and incompetence about Crown’s responsibilities under laws governing the prevention of money laundering. Regulators, especially in Victoria, have cut Mr Packer far too much slack. That must stop.

Note from the Editor

The Herald editor Lisa Davies writes a weekly newsletter exclusively for subscribers. To have it delivered to your inbox, please sign up here.

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