Crown reveals looming debt breaches

·3-min read

Crown Resorts has claimed it could default on hefty debts impacting thousands of innocent employees if its Melbourne licence is not renewed.

The company's Victorian operation, under the microscope of a royal commission into whether it can retain a licence, wrote a letter to the state government last week requesting a meeting to discuss its commercial affairs.

In hearings just a day earlier, the gaming giant's executive chair Helen Coonan was grilled about the July 2 letter from Crown's external lawyer Arnold Bloch Leibler to Consumer Affairs, Gaming and Liquor Regulation Minister Melissa Horne.

Commissioner Ray Finkelstein said a "plain English" reading of the letter was that Crown was seeking to "make sure that the commission doesn't make a particular finding".

Ms Coonan denied the company was trying to pre-empt or interfere with the royal commission.

A redacted version of the letter made public on Friday revealed the gaming giant had told Ms Horne of the "consequences for Crown and stakeholders" that would arise from a negative outcome of the commission.

"It is not in the public interest for Crown to fail," the letter written by law firm partner Leon Zwier said.

Crown is the state's largest single-site private employer with just under 12,000 employees, most of whom have not contributed to the failures of the company, it said.

"Through COVID-10 (employees) have suffered significant uncertainties. They will suffer greater uncertainties if there is an EOD (event of default).

"An EOD may also provide potential overseas suitors an opportunity to take advantage of the situation."

Crown told the minister that a negative finding against it could result in defaulting on debts worth $700 million.

This would have "severe consequences" for Crown and all its stakeholders, the company said, including shareholders, employees, unions, trade creditors, patrons and the hotel precinct and Melbourne tourism industry.

Crown Resorts has received takeover offers from The Star entertainment group, which owns venues in Sydney, the Gold Coast and Brisbane, as well as US private investment firms Oaktree Capital and the Blackstone Group.

Any suitor will want a guarantee that Crown's casino licence is not suspended, the letter stated.

The company told the consumer affairs minister that it acknowledged the commission's role in "shedding light on prior failures of culture, systems and people" so that such failings are not repeated.

It said it would consider terminating employment of any executives or employees that the royal commission makes adverse findings against.

Friday marks the final day of eight weeks of hearings into the casino operator, in which more than 60 witnesses have given evidence.

The hearings have covered failings and lack of compliance of the Melbourne casino, including that only 12 staff were employed to ensure an estimated 64,000 daily visitors gambled responsibly.

It also emerged that Crown had underpaid gaming taxes by the millions, though two letters made public by the commission on Friday stated Crown had underpaid by $8.8 million - not $272.6 million as previously reported.

"It is Crown's intention to pay our estimation of the amount owing, together with penalty interest," chief executive officer Steve McCann wrote to both the gaming regulator and the Department of Treasury and Finance on July 1.

Commissioner Ray Finkelstein is expected to deliver a final report detailing his findings and recommendations by October 15.

His inquiry centred on Crown's Melbourne operations follows the Bergin inquiry in NSW, which in February found Crown unfit to run a casino at its Barangaroo complex in Sydney.

Separately, the Victorian Commission for Gambling and Liquor Regulation (VCGLR) on Friday confirmed that an independent investigation will examine serious criminal allegations at Melbourne's Crown Casino.

The allegations, made by former inspectors of the casino, will be investigated by prominent QC Ian Freckelton.

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