Crown Resorts Directors Face Calls to Quit Before Annual Meeting
Crown Resorts Directors Face Calls to Quit Before Annual Meeting
(Bloomberg) -- Directors of Crown Resorts Ltd. should quit over governance failures exposed by a casino inquiry in Sydney, an investor group said, setting the stage for a potentially damaging shareholder meeting next week.
Crown has been rocked by the probe, which is investigating media reports that gangs laundered money at Crown’s casinos and the firm used junket operators with links to drug traffickers. Testimony from executives and directors has exposed a raft of risk-assessment failures, as well as private briefings about Crown’s performance to billionaire shareholder James Packer.
“A number of long-serving directors should be considering their position in light of what has emerged,” Louise Davidson, chief executive officer of the Australian Council of Superannuation Investors, which advises the nation’s largest pension funds.
The demands pave the way for a partial clearout of Crown’s board. Much may hang on the vote of Packer, who owns about 35% of the company. Giving evidence last week, the billionaire, who stepped down as a director in 2018, said the company’s compliance regime had been a “failure” and directors need to be more independent.
A representative for Crown didn’t respond to an email seeking comment on the demands.
Board members Jane Halton, John Horvath and Guy Jalland, who is the head of Packer’s private investment company, are seeking re-election at the Oct. 22 meeting.
ACSI’s Davidson said the inquiry’s evidence “reflects poorly on the board as a whole,” beyond the three directors seeking another term. “Investors will be looking for director accountability,” she said.
The inquiry, overseen by retired Supreme Court Judge Patricia Bergin, is also assessing whether Crown’s links with Hong Kong-based Melco Resorts & Entertainment Ltd. breached terms of its license to operate a planned casino in Sydney.
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 casino. Crown’s A$2.2 billion ($1.6 billion) Sydney harborside gaming development is due to open in December.
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