Questions were raised about the conduct of executives from Mr Packer’s private company CPH who sat on the Crown board and fed information about the company to the billionaire via a major shareholder protocol, which had been kept secret.
The directors admitted they had not asked enough questions about Crown’s activities in China, which involved conducting an illegal office and culminated in the arrests of 19 Crown staff, and the jailing of 11 of them, on gambling offences. When allegations of criminal influences infiltrating the casino business through junket operators were made by The Age, The Sydney Morning Herald and 60 Minutes, Crown dismissed them as “nonsense”.
The company did not launch its own inquiry but, instead, issued a statement to the ASX and took out full-page newspaper advertisements defending itself. The inquiry drew admissions from the directors that critical parts of the statement were incorrect and misleading.
Mr Packer admitted he was the driving force behind encouraging junket operators into relationships with Crown. As has been been proved, some of these operators had links with organised crime.
Mr Packer admitted to making a threat against Australian private equity chief Ben Gray and his family at the height of negotiations over trying to take Crown private. The details of the threatening email were kept secret by the inquiry at the urging of Mr Packer’s legal team. Mr Packer, who was a Crown director at the time, said he was ill. He agreed it was “shameful”. And yet he has never apologised to Mr Gray or his family for his behaviour.
At the end of an excruciating three-day appearance, the billionaire offered the casino inquiry commissioner, Patricia Bergin, a how-to-fix-it plan for Crown. He would not return to the board, there should be more independent directors, and the right people were needed in the right management jobs. He suggested an end to the major shareholder protocol and a possible cap on shareholdings in Crown. This might require him to sell down his 36 per cent stake.
It’s hard to imagine how any of the current directors can remain on the Crown board. In the end, the inquiry has exposed how Mr Packer has conducted some of his business affairs, the charade of independence on the Crown board, the negligence of its directors and management, and spectacular governance failures.
It questions the competence of regulators in Victoria and Western Australia, where Crown holds casino licences. Where have they been? Mr Packer and the Crown directors and managers have made Ms Bergin’s task of deciding whether to recommend the company should continue to hold a casino licence for Sydney in its current form extremely easy.