James Packer has told a public inquiry he did not consider the NSW government’s ban on Macau casino kingpin Stanley Ho when he sold $1.7 billion worth of Crown Resorts shares to a company connected to the controversial billionaire.
During his second day of evidence at the NSW Independent Liquor and Gaming Authority’s probity inquiry Mr Packer also blamed former Crown executives for the disastrous failure that led to the casino giant’s employees being jailed in China, and revealed fears Macau’s casino authority may have banned Crown from the territory after that incident.
The inquiry was launched to investigate the group’s dealings with figures tied to organised crime and Mr Packer’s sale of a 19.9 per cent stake in Crown to Melco Resorts in May last year.
Mr Packer told the inquiry on Wednesday he was at one time aware that Melco was partially owned by a family trust called Great Respect, which included Stanley Ho as a beneficiary until his death in May 2020.
Crown’s NSW casino licence says it must prevent Stanley Ho – the father of Melco boss Lawrence Ho – and Great Respect taking an interest in the group due to Mr Ho’s alleged organised crime links.
In a tense exchange with counsel assisting the inquiry, Adam Bell, SC, Mr Packer initially claimed he had forgotten about the rules barring Mr Ho from investing in the Sydney casino.
“I left it to my legal team, and I gave it no thought,” Mr Packer said.
But Mr Bell challenged Mr Packer’s forgetfulness, asking: “Isn’t the truth that you didn’t think of it at all?”
Mr Packer, agreed with Mr Bell’s assertion. He also agreed did he turn his mind to the possible threat the transaction posed to Crown’s licence. “That’s correct, Mr Bell,” he said. “I left it to my legal team”.
The casino giant’s 36 per cent shareholder blamed the October 2016 arrest of 19 Crown employees in China on Crown’s former chief executive Rowen Craigie and chairman Robert Rankin, who “let the side down” by not being aware that authorities were cracking down on foreign casinos.
Mr Packer said he was “sure” other Crown insiders who knew about red flags – such as Michael Johnston, who worked for Mr Packer’s private company and represented Mr Packer on Crown’s board – did not tell him about incidents in this period, including that Chinese police questioned a Crown employee on suspicion of gambling crimes in mid-2015.
“Is it likely that you were told about those matters but you’ve forgotten?,” Mr Bell asked.
“No”, Mr Packer responded. “I would have emailed Mr Craigie and Mr Rankin in the
first instance and said, ‘what’s happening?’, or asked for an explanation.”
Mr Packer, who was Crown’s chairman until August 2015, accepted “not all, but some’ of the responsibility for Crown’s failure to manage the risks in China. But he rejected Mr Bell’s suggestion this happened due to “a corporate culture that focused excessively on profits”.
Concerns over Crown’s Macau ‘ban’
The inquiry was presented with emails in which Mr Packer asked Melco boss Lawrence Ho for help over his concerns that the Macau gaming regulator had banned Crown from the gaming mecca, which was an apparent obstacle to a $10 billion takeover of Crown by US casino giant Wynn Resorts in early 2019. The deal was ostensibly scuttled when it leaked to the press.
Mr Packer told Mr Ho he was confident Wynn would “re-bid if they’re sure Macau regulatory approvals will be OK, so I’m hoping you can work your magic” by talking to the authority.
“I don’t think I should be banned from having a 10 per cent with no board representation interest,” the email said.
Mr Packer agreed with Mr Bell he was asking Mr Ho to “speak to the Macau regulatory authorities about a possible re-invigoration of the Wynn transaction”.
The inquiry did not go into why Mr Packer believed authorities would object to Crown owning some of Wynn’s Macau casino. However it was revealed in an 2018 email that Mr Packer said Crown had been “forced to sell out” of its previous Macau joint venture after the arrest of its staff in China.
Mr Packer’s request for help from Mr Ho led to a discussion of a possible merger between then $9 billion Australian gambling giant and the $US7.7 billion ($10.76bn) Melco, before leading to the agreement for Melco to buy 19.9 per cent of Crown.
In the last few minutes of Wednesday’s hearing counsel for Crown, Neil Young, QC, presented the findings of a 2006 Victorian Commission for Gambling and Liquor Regulation report into the relationship between Melco and Crown.
“The finding was that further rigorous investigation determined that Dr Ho does not have any ongoing influence over Melco or the new chair of Melco, Mr Lawrence Ho,” Mr Young said.
Mr Packer will continue giving evidence on Thursday.
Source: Thanks smh.com