Packer agrees to Crown board ban in inquiry fallout

Packer agrees to Crown board ban in inquiry fallout - 16th April 2021


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James Packer has struck a deal with the NSW gaming regulator. CREDIT: GETTY

By Patrick Hatch

Billionaire casino mogul James Packer has agreed to play no role in how Crown Resorts is run for the next three-and-a-half years, after the damning Bergin Inquiry found his influence was a reason it was unfit to open its new Sydney casino.

The NSW Independent Liquor and Gaming Authority (ILGA) said on Friday it had reached an agreement with Mr Packer, who owns 37 per cent of Crown, which included banning him from nominating anyone to Crown’s board until October 2024.

ILGA has been negotiating with Mr Packer’s private company Consolidated Press Holding (CPH) for months over the future of his involvement at Crown, with the gambling regulator confirming on Friday it has decided not to force him to sell down his stake.

The long-running Bergin Inquiry found in February that Mr Packer exercised the “real power” at Crown which distorted proper corporate governance and had “disastrous consequences for the company”.

The inquiry found Crown was unfit to hold the licence for its new casino at Sydney’s Barangaroo, after confirming reports by this masthead that the company had facilitated money laundering and gone into business with figures linked to organised crime. ILGA has blocked Crown from opening the gaming floors at its $2.2 billion tower until it can prove it has reformed itself.

ILGA said that “some of the key” undertakings that CPH had agreed to were that it would not seek to have a nominee or any other person appointed as a Crown director before October 2024, and that it would not try to amend Crown’s constitution in a way that would affect the management or operation of Crown.

All three of Mr Packer’s nominee directors resigned following the Bergin report as part of a boardroom clean-out that claimed five directors and chief executive Ken Barton.

CPH has also agreed that it will not enter into any information sharing arrangements with Crown, after the Bergin Inquiry uncovered the free-flow of sensitive financial information between the parties under a secret deal other shareholders did not know about.

ILGA said CPH would not initiate any discussions with Crown about its business operations, “other than through public forums”.

Crown is currently weighing up an $8 billion takeover offer from US private equity group Blackstone, which already owns 10 per cent of the company.

The Sydney Morning Herald and The Age reported on Thursday that CPH and ILGA had agreed that Mr Packer would not vote his shares on any issues relating to Crown’s operations - such as the appointment of new directors - but would be free to vote on any takeover offers, maintaining his position as a kingmaker in any such deal.

The gambling regulator said the agreement, which would be finalised and recorded in an enforceable legal document, came following discussions about the Bergin Inquiry’s final report “which raised significant concerns over the influence of CPH and Mr Packer... on the management and operation of Crown’s Barangaroo casino”.

(The Sydney Morning Herald)