Unfit and under fire: Packer’s Crown is rudderless and vulnerable

More than 800 pages outlining its failures to address apparent money laundering, its risk management dereliction and its dysfunctional governance reads like a case study in how not to run a company.

Packer could have lost the right to control the gaming empire he nurtured while his dream to preside over the opening of a grand Sydney casino has all but evaporated.

It is difficult to imagine how regulators in Victoria and Western Australia can ignore the findings of the NSW commission of inquiry. More likely the report will set off a regulatory domino movement.

Once digested the report will place enormous pressure on these regulators to justify how they have allowed Crown to operate with such light oversight.

Thus Packer could have lost the right to control the gaming empire he nurtured while his dream to preside over the opening of a grand Sydney casino has all but evaporated. He and Crown Resorts appear headed for a mandated divorce.

This leaves not only Packer’s legacy in tatters but means Crown’s future ownership is potentially up for grabs.

Crown Resorts, which revolved around Packer, will be rudderless and vulnerable. Some of his most loyal corporate henchmen have departed and others will need to follow.

His right-hand man, Michael Johnston, was recommended in Bergin’s report to end his tour of duty with Crown, the company’s chief executive Ken Barton will also need to be replaced and non-executive director Andrew Demetriou won’t survive.

His loyal lieutenant, John Alexander, has recently departed and most of the old guard on the Crown board will be wheeled out over time.

The replacements won’t be put through the Packer filter – nor will they be beholden to him. Rather, they will answer to all shareholders and be approved by chairman Helen Coonan – who has managed to escape most of the report’s bullets.

If Packer is stripped of his right to control Crown, it would render him impotent to set company strategy or be involved in policy decisions like dividends – which is a major source of Packer’s income.

He would be the equivalent of a passive investor – a bystander whose only window inside the company will be the one representative director.

Although Packer has demonstrated previously that he is a willing seller – at a price – any new legislation that curtails any party from buying more than 10 per cent will make it more difficult for Packer to sell his shares.

He could sell them widely to institutional investors but this would not attract a control premium.

Shareholder caps are placed on many of Australia’s gaming companies and this would bring Crown into line with industry practice. Regulators have on numerous occasions allowed takeovers if the buyers have been approved.

When Packer attempted to sell his holding in Crown in 2019, the price of more than $14 was being sought. With Crown’s current share price now sitting closer to $10 the opportunistic bidders will be sharpening their pencils.

One of Crown’s large shareholders, Blackstone, is considered a contender and analysts are suggesting a merger between Crown and its arch-rival The Star could also emerge.