Crown Resorts' Annual General Meeting (AGM) showcased the company's disregard for meaningful reform, writes Tim Costello.
THE ANNUAL Crown Resorts AGM last week should have been a moment for admission to shareholders by the Board that they were in trouble and a moment to reassure investors that they had strategies to address a burning platform. Instead, they blamed everyone but themselves.
John Alexander, the CEO and Chair of the Board, blamed the media for being sensationalist, he blamed whistleblowers, he blamed activists like Stephen Mayne and me. And their strategy for the future? None.
Every Board member parrotted as their sole defence the same prepared talking point that Crown is the most regulated company in Australia. Four of the directors were then re-elected using James Packer’s 250 million votes and Mr Packer’s 37% stake was also used to prevent a remuneration report first strike by investors over excessive executive salaries, including another $4.5 million last year for Mr Alexander.
Has there ever been a greater moment of corporate denial and bunkering down like this by an ASX100 company? Not that I can remember.
Nine Entertainment’s newspapers, led by The Age, along with their flagship 60 minutes program had previously detailed junket partnerships of criminals including ice traffickers and sex traffickers through brothel owners who worked for Crown and had been in trouble with the law for human trafficking. Tom Zhou, the Chinese President’s cousin and who The Age alleged is a criminal fugitive on Interpol lists, was also revealed as a Crown high roller.
And what about Alvin Chau, the CEO of junket operator Suncity who has been banned from entering Australia by Home Affairs but his company still has dealings with Crown.
This was followed by revelations of video footage of money laundering in Crown’s high roller rooms leaked by whistle-blower inspectors at the Victorian Commission for Gambling and Liquor Regulation (VCGLR), Victoria’s ineffective gambling regulator. Leaked because of their frustrations that Crown is above the law.
Even just last week there were revelations that Crown high roller Joseph Wong had lost $6 million at Crown between 2010 and 2018. Wong is blacklisted by the UN and Australia because he was the alleged arms dealer for Liberian dictator and war criminal Charles Taylor. Wong is not allowed to step foot in Australia and is named on a UN Security Council travel and financial sanctions list.
But he freely came to Australia to add to Crown’s bottom line.
This is the tip of the iceberg as investigative journalist Nick McKenzie and his colleagues at Nine Entertainment have a treasure trove of documents leaked about Crown’s dirty dealings.
Public outrage has forced the hand of governments and now there are four separate inquiries at Federal, Victorian and NSW state levels into Crown. But at the AGM last week, the board bunkered down claiming there was nothing to see here during more than two hours of discussion.
You can read the full 40 page AGM transcript for yourself.
I asked them why not act like the big four banks, which eventually agreed to a call for a Royal Commission to clear the air instead of facing endless piecemeal separate enquiries? I encouraged them to call for a Royal Commission into gambling (with terms of references including Crown).
Australia has 18% of the world’s pokies and we are cursed with the greatest per capita losses of any nation in the world and 30% more than the nation that comes second. When I raised this point at the Crown AGM, I was instantly dismissed with contempt.
I asked if John Alexander regretted the full page Crown newspaper advertisements sledging Federal Independent MP Andrew Wilkie when he revealed Crown’s tampering with pokies, given that the regulator found these allegations to be true and imposed a record $300,000 fine on Crown.
No, Mr Alexander did not regret that.
How can we take the Crown board’s vehement denials against these new charges seriously, given they still are in denial?
And how’s this for poor optics: the contract for servicing Crown’s pokies is with a company called Amtrak, which is chaired and majority-owned by none other than Jeff Kennett. The former Victorian Liberal Premier was Crown’s chief spruiker in the early years.
His Government allowed Crown to become a downtown casino more than twice the size of the biggest casino in Las Vegas. Remember that Las Vegas is a destination gambling centre in the desert, not a major international city like Melbourne.
Shareholder activist and fellow gambling reform campaigner Stephen Mayne honed in with governance questions asking why John Alexander, who has earned $73 million over the past 16 years working for James Packer, was not up for re-election as chairman of the board after his 3-year term finished. Turns out he is using the voting exemption under Australian corporate law given to CEOs, when he also doubles up in the dual role of chairman.
He really should put himself up for election like other executive chairs such as Gerry Harvey and Kerry Stokes.
These questions were dismissed as within the law and there was no need for reducing the influence of management represented in John Alexander or any need for an independent director to become chair. Neither four enquiries nor exposure and public outrage necessitate any Board consequences at this company. James Packer with a reducing 37% stake gets to appoint four of the 10 directors and have a loyalist and denialist installed as executive chair to lead the so-called independent directors who, based on what I saw at the Crown AGM, make a mockery of the word independent.
One of those independent Directors is Helen Coonan, a former Minister in the Howard Government. I asked if it is not a bad look to have so many ex-politicians at Crown given they set the political architecture that has allowed the gambling explosion in Australia?
Ms Connan said she had not been in politics since 2012. So I asked her this question: when she was in government and the Productivity Commission (commissioned by my brother, then Treasurer Peter Costello) discovered that we had 20% of the world’s pokies, John Howard as Prime Minister said he was ashamed of this. Did she share that shame? She did not answer.
Andrew Demetriou responded to my question that it is hard for Crown to claim it is a social leader like the AFL, given that over 70% of Crown’s revenue comes from gambling and a business model based on addiction. But he thought the AFL and Crown were very similar and both entertainment businesses. Take careful note AFL, as you negotiate new sports betting sponsorship that target our kids with an adult product and corrupt the game we love.
My sense is that Crown is in reality still a Packer-controlled private business masquerading as a public company. Why is it allowed to get away with this?
The answer is probably because it is a big taxpayer and it donated $180,000 to the major parties in political donations last year. This is private capture of the State that gives a malevolent meaning to the phrase “a Minister of the Crown”.
Tim Costello is chief advocate at The Alliance for Gambling Reform.
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