Packer should face ban from Sydney casino, inquiry told
The NSW government should consider banning James Packer from being closely involved with Crown Resorts' new Sydney casino after it was revealed he sent a threatening email to a prominent Melbourne businessman in 2015, an inquiry has been told.
Counsel assisting Adam Bell, SC, also told the NSW Independent Liquor and Gaming Authority (ILGA) inquiry on Thursday that Crown's chief executive Ken Barton either "deliberately misled" the company's minority shareholders or at least "chose not to tell them the truth" to hide the company's secret information sharing deal with Mr Packer.
James Packer gave testimony to the inquiry in October.
In the second day of his final submission to the inquiry, Mr Bell took Commissioner Patricia Bergin back over the explosive emails presented last month in which Mr Packer sent a threatening email to a businessman referred to as Mr X, since confirmed to be private equity executive Ben Gray, after negotiations to privatise Crown soured.
Giving evidence last month, Mr Packer agreed that his behaviour was "shameful" and "disgraceful" and attributed it to his bi-polar disorder.
However, Mr Bell said on Thursday there had been "no medical evidence presented to this inquiry" that supported the connection between Mr Packer's threatening email and any health condition. In fact, Mr Bell said that other emails Mr Packer sent on that same day including to Crown’s then-chairman Robert Rankin were in "perceptive and business-like" terms.
"The difference was that Mr X had conveyed information to Mr Packer which was bad news, which Mr Packer did not want to hear," Mr Bell said.
"We submit that you should recommend to the [NSW gaming] authority that it reconsider its approval of Mr Packer as a close associate of the licensee having regard to his conduct in these emails."
Under NSW's gambling legislation, a "close associate" is a person who has a position of influence over the running of a casino and must be of "good repute, having regard to character, honesty and integrity". Mr Packer currently owns 36 per cent of the shares in Crown and has three nominee directors on its board.
In further submissions, Mr Bell reviewed emails Mr Packer sent instructing various Crown executives and directors about how to run the business even after he stood down from the board in 2018. He said it showed Mr Packer remained a "de facto director" of Crown.
This is relevant when considering whether Mr Packer’s sale last year of 9.99 per cent of the shares in Crown to Hong Kong’s Melco Resorts, and an agreement to sell 9.99 per cent more for a total price of $1.7 billion breached Crown’s NSW casino licence.
The transaction gave a financial interest to Macau casino kingpin Stanley Ho, who has since died, and a list of associated entities which Crown is banned from dealing with because of Mr Ho’s alleged links to organised crime. Mr Bell said that if Mr Packer was found to be a director, his knowledge of the Melco deal could be attributed to Crown.
"That bears on the question of whether the Melco transaction put Crown Resorts in breach of its regulatory agreements with the authority," Mr Bell said.
Crown regularly shared confidential information with Mr Packer under a secret "controlling shareholder protocol" signed after 2018, which Mr Bell said Crown showed determination to keep "hidden from the market and its own shareholders".
That was illustrated by Crown’s current CEO, Mr Barton, declining to disclose the arrangement to investors even when asked directly at Crown’s 2019 annual meeting about what information was shared with Mr Packer.
“Mr Barton gave evidence that he had not forgotten about the protocol when he provided the answer," Mr Bell said. "The only conclusion that can be drawn is that Mr Barton, not accidentally but deliberately misled Crown Resorts shareholders in providing his answer, or chose not to tell them the truth".
It was "remarkable", Mr Bell said, that every single Crown Resorts board member at the meeting failed to appreciate Mr Barton had not answered the question accurately and did nothing to correct him.
Mr Barton, who was elevated from chief financial officer to CEO in January, apologised to shareholders at the company's AGM last month for the incident.
"It was never my intention to mislead or provide a ‘non-answer’," Mr Barton said.
Business reporter at The Age and Sydney Morning Herald.