Crown defends China work despite arrests

Hannah Ryan
·2-min read

Lawyers for Crown Resorts deny the company's failings, which exposed staff to arrest by Chinese authorities, mean it is unfit to run a new Sydney casino.

The gambling giant launched its final bid to keep the licence for the $2.2 billion casino on Monday as its legal team delivered closing submissions in an extraordinary probity inquiry.

The public company faces a real risk that Independent Liquor and Gaming Authority commissioner Patricia Bergin will find it is unsuitable to hold the licence for the new casino.

The damning inquiry has questioned the culture and governance of Crown and its former director and executive James Packer, with counsel assisting recommending findings that neither is presently fit to be associated with the casino.

Crown's silk, Neil Young QC, said on Monday the company had been within its rights to believe its operations in China were legal.

Nineteen Crown staff were arrested in China in 2016, accused of violating strict gambling laws. The arrests are the subject of an ongoing class action against Crown.

Mr Young admitted that company staff had received warning signs of a crackdown by Chinese authorities, like the 2015 arrests of South Korean casino staff in China.

But the only flaw in the response to these red flags was that executives did not elevate them to the board and use the company's risk management processes, Mr Young said.

Instead, while the risks of operating in China were taken seriously, individuals like then-CEO Rowen Craigie decided how to deal with them.

The inquiry has heard of an email from Crown executive Michael Chen which suggested staff working in China be issued with letters stating that they worked outside of China but were there on business travel.

My Young conceded the suggestion was "improper" and could be viewed as "quite inappropriate by Western standards", but said it was motivated by a concern for staff safety.

Crown's Chinese operations were consistent with the legal advice it received at the time, Mr Young argued.

Crown says it has taken numerous steps to clean up its act since the China arrests, including replacing Mr Craigie and chair Robert Rankin.

The ILGA will meet on Wednesday to decide whether to put a halt to the planned December opening of the flagship Barangaroo facility while the inquiry is ongoing.

Ms Bergin's inquiry has heard evidence of Crown's business dealings with alleged organised crime figures, money laundering appearing to go on under Crown's nose, and a board that did not know about some of the serious risks confronting the company.

The inquiry has also investigated a 2019 share sale agreement between Mr Packer's private company and Melco Resorts for 19.99 per cent of Crown, which may have caused Crown to breach its agreement with the NSW regulator.

Crown's lawyers will continue closing submissions on Tuesday, addressing the company's relationship with junket operators.

Ms Bergin will issue a report in February 2021.