Crown Tightens Money-Laundering Controls, Eyes New Directors
Crown Tightens Money-Laundering Controls, Pledges Board Renewal
(Bloomberg) --
Crown Resorts Ltd. Chairman Helen Coonan “unreservedly” apologized for risk-management failings exposed by a public inquiry as she pledged to renew the board and tighten anti-money laundering controls at the company’s casinos.
“The board has determined to bring forward significant reforms aimed to address any shortcomings and re-instill full confidence in Crown’s operations,” Coonan said in a speech at the firm’s virtual annual meeting on Thursday.
Crown shares were up 1.9% at 2:48 p.m. in Sydney.
The Australian casino operator has been rocked by the inquiry, which is investigating reports of money laundering at Crown’s facilities. At stake is Crown’s license to operate a Sydney gaming resort, due to open in December. The changes announced Thursday aim to shore up trust in the company before the inquiry delivers its verdict.
Coonan laid out what she called “wide-ranging” reforms, some of which will be in place before the inquiry reports before Feb. 1. She also vowed to introduce new directors following concern the board lacked independence from billionaire shareholder James Packer.
“Shareholders have given a clear and powerful message that board renewal is required,” Coonan said. “Changes will be made.”
Crown late yesterday said it ended a controversial agreement with Packer that gave him confidential information about the company’s performance not available to ordinary shareholders.
Crown’s Areas of Reform:
- Compliance, risk, audit and anti-money laundering functions will report directly to the board or a board committee
- Building a culture of compliance, including “no tolerance for those who fail to respond”
- Assessing money laundering risks beyond reporting obligations
- Improving systems and structures to protect against criminal exploitation
Shareholders voted to re-elect board members Jane Halton, John Horvath and Guy Jalland, the head of Packer’s private investment company. Still, given the number of opposing votes, Horvath told the meeting that he intends to leave the board. Almost a third of proxy votes opposed his re-election, while 41% opposed Jalland’s reappointment.
Jalland told the meeting he noted the “significant and serious” protest vote against him, but didn’t say he would quit the board. Halton said she considered resigning, though said the 25% share of votes against her suggested that on balance she had the support of shareholders.
Crown’s remuneration report was opposed by 34% of votes, more than the 25% threshold to count as a formal rejection. Under Australia’s “two-strikes” rule, if shareholders vote down a company’s remuneration package two years in a row, the board may be voted out of office.
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