Billionaire Packer Acknowledges ‘Shameful’ Email Threat
Billionaire Packer Acknowledges Making ‘Shameful’ Email Threat
(Bloomberg) --
Threatening private emails by Crown Resorts Ltd.’s billionaire shareholder James Packer came to light in a probe into alleged money-laundering activities at Australia’s largest casino operator.
Though he agreed with lawyers acting for the inquiry that the emails were “shameful” and “disgraceful,” Packer said Tuesday they reflected his poor mental health at the time, and he’s now being treated for bipolar disorder.
The threatening emails, sent as he explored a privatization of the company in late 2015, risk being used as evidence to show Packer shouldn’t remain a close associate of Crown. Crown’s Sydney casino could be affected, dealing a further blow to a company that’s largely retreated from overseas operations.
The probe, which is being overseen by retired Supreme Court Judge Patricia Bergin, was set up last year following media reports that gangs laundered money at Crown’s casinos, and the company used junket operators with links to drug traffickers.
In a report expected early next year, Bergin will recommend if Crown should lose or keep its Sydney license, or make governance and operational changes in order to operate the facility. Crown’s A$2.2 billion ($1.6 billion) Sydney harborside gaming development is due to open in December.
As questioning resumed on Wednesday, Packer said he accepted “not all, but some” of the responsibility for ethical and corporate governance failures tied to Crown’s business in China.
He agreed that Crown’s management of legal advice in 2015 before the arrest of executives in China was inadequate. Packer sought to blame risk failures on two company executives who he alleged didn’t keep him informed, even as Beijing’s crackdown on gambling raised safety fears among staff in China.
“This is not merely a failure of one or two individuals is it, this is a failure of those processes” in mitigating risks in Crown’s operations, Adam Bell, the council assisting the inquiry, asked Packer.
“I agree,” Packer replied.
‘Z Co.’ and ‘Mr X’
The private email exchange, the details of which were kept confidential by the inquiry on Tuesday, referred to a potential buyout of Crown with the financial support of a firm labeled “Z Co.” Under questioning, Packer acknowledged he made verbal threats in the emails against “Mr X,” who was a representative of Z Co. Packer was a director of Crown at the time.
The 53-year-old agreed with Bergin that his communications were “totally unsuitable” for a director of a public company.
“How can the NSW regulator have any confidence in your character or integrity in light of your conduct in these emails?” Bell asked Packer, referring to the casino watchdog in New South Wales state.
“Because I was sick at the time,” Packer replied.
Packer owns about 35% of Crown, Bloomberg data show. In a submission to the inquiry, Packer said he had been taking strong medication since 2016, which impairs his memory. He stepped back from all public commitments in March 2018 due to mental health issues.
In late 2015, Packer was in talks to return some of Crown’s casino assets to private ownership, people with knowledge of the matter said at the time. Packer’s private investment vehicle was speaking with private equity firms and pension funds about a possible joint bid for some Crown assets, the people said.
The inquiry has already heard testimony from senior Crown executives and directors, and Bergin has criticized the state of the company’s anti-money-laundering systems. Last month, she said the lack of transparency at Crown exposed by the probe was a “debacle,” and she called some of the evidence “extraordinarily troubling.”
Chief Executive Officer Kenneth Barton, for instance, said the company hadn’t yet fully reviewed the specific accounts that were allegedly used by money launderers.
Crown has said it will work with regulators on any recommendations. Before the inquiry, Crown called last year’s media reports part of a “deceitful campaign” that aimed to damage its reputation.
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