Crown Slumps as Financial-Crimes Regulator Starts Probe
Crown Resorts Probed by Australia’s Financial Crimes Regulator
(Bloomberg) -- Crown Resorts Ltd. stock slumped the most since March after the casino operator said it’s being investigated for a potential breach of anti-money laundering and counter-terrorism financing rules.
Australia’s financial-crimes regulator has started an enforcement probe into compliance at Crown’s flagship Melbourne casino, the company said Monday. Austrac’s concerns arose during an assessment that started in September 2019 and focused on how the casino handled individuals deemed to be high-risk and politically exposed.
It’s not clear who those people were, but Crown has courted wealthy Asians as part of its programs for high-stakes gamblers.
With Crown’s annual meeting set for Thursday, the probe piles pressure on a company already beset by governance failures. A separate inquiry in Sydney has unearthed lapses in anti-money laundering controls and there are growing calls from investors for a board shakeup and more independence from billionaire shareholder James Packer.
Crown shares sank 8.8% to A$8.195 at 12:22 p.m. in Sydney trading. That extended the year’s slump to 32%.
Crown said it will fully co-operate with Austrac and respond to all information requests. Austrac confirmed the investigation, but declined to comment further.
Austrac has a range of options to enforce compliance, and can also apply for a civil penalty order from Australia’s Federal Court.
These fines can vary hugely, but Westpac Banking Corp. last month agreed to pay a record A$1.3 billion ($923 million) fine to settle Australia’s biggest breach of anti-money laundering laws. Tabcorp paid A$45 million to settle 108 anti-money laundering/terrorism financing breaches in 2017.
The dual probes leave Crown fighting to salvage its reputation before the Sydney inquiry hands down its report early next year. The inquiry is determining whether Crown is fit to run a new casino being built in Sydney. The A$2.2 billion harborside gaming development is due to open in December.
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