Crown needs "root and branch" change, says chairman

Crown needs "root and branch" change, says chairman

Crown Resorts (ASX: CWN) chairman Helen Coonan says significant changes have begun at the company following an inquiry into its alleged conduct facilitating money laundering and junkets.

Crown Resorts (ASX: CWN) chairman Helen Coonan says significant changes have begun at the company following an inquiry into its alleged conduct facilitating money laundering and junkets.

The Bergin Inquiry report released Tuesday afternoon deemed Crown "quite unsuitable" to hold a casino licence in NSW, derailing any immediate plans to open the gambling section of Crown Tower in Barangaroo, Sydney.

Following an investigation involving 187 summonses, more than 80,000 documents and 60 days of public hearings, the Honourable Patricia Bergin SC raised doubts about whether a licence should be given if Crown's board stays intact, and called for a more thorough audit of the group.

In the wake of the report two directors have resigned to date - Guy Jalland and Michael Johnston, both representatives of the Packer Family's Consolidated Press Holdings (CPH).

CPH also terminated a consultancy agreement with another board member John Poynton, meaning CPH is "no longer separately represented on the board", although it is still a substantial shareholder in Crown with around a 37 per cent stake.

In a message released to the ASX today, Coonan welcomed the Commissioner's report of the NSW Independent Liquor and Gaming Authority (ILGA) Inquiry.

"The Commissioner has made findings of serious conduct, culture and compliance issues that clearly do not accord with our values. I accept criticism is warranted and reiterate our unreserved apologies for these shortcomings," Coonan said.

"While we have already taken a number of important steps to improve our governance, compliance and culture, I recognise from the Commissioner's report we have much more to do.

"We do not underestimate the scale of the problem and appreciate there is a need for 'root and branch' change. This change has commenced."

She said the company owed it to the 20,000-plus people who work at Crown's properties to move with pace as it implements the necessary reforms.

"Importantly, the Commissioner's report outlines a pathway towards suitability to give effect to the Barangaroo Restricted Gaming Licence," she said.

"Noting that ILGA will now consider and respond to the recommendations, I today commit to working in an orderly and coordinated manner with [ILGA chairperson] Mr Crawford.

Coonan acknowledged the contribution of former Crown directors Guy Jalland and Michael Johnston.

"On behalf of the Board, I thank Guy and Michael for their valuable service and wish them well with the future," she said.

"Their decision will help accelerate our plans for Board renewal and demonstrates we are moving quickly in our response to the Commissioner's report."

Coonan has previously apologised for Crown's failings, and the inquiry highlighted numerous instances when she had been unaware of activities of concern at the company, including the likelihood of money laundering through certain bank accounts and breaches of Chinese laws against promoting gambling.

"However, Ms Coonan agreed that: (i) it is unsatisfactory for boards of Australian publicly listed companies to simply say they were not informed of important matters; and (ii) boards of listed companies have an obligation to constructively challenge management and ask the hard questions," Bergin said in the report.

"Ms Coonan was led to believe that at all times the law was being observed in China."

Photo: Wikimedia Commons

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