Codewords used as part of Crown’s China operations, lawsuit reveals
Employees of Crown Resorts were told to use codewords to discuss the casino operators’ China ventures, court documents revealed.
The Guardian reports that the codewords were used by Crown to conduct its China operations covertly and avoid a crackdown on gambling by authorities.
Other measures allegedly used included providing a letter to an employee in China for him to show authorities that failed to mention the company’s casino business, running an “unofficial and clandestine” office in Guangzhou and misleading authorities about the purpose of flights made by its fleet of private jets.
Law firm Maurice Blackburn made the allegations in documents filed in the federal court as part of a class action it is running on behalf of Crown shareholders.
The value of their holdings in the company plunged in October 2016 after staff in China were detained by authorities.
It comes as Crown prepares to face a royal commission in Victoria set up to investigate whether it is fit to hold the licence to run its casino in Melbourne, the group’s biggest and the acne of alleged wrongdoing already uncovered by an inquiry in New South Wales.
Hearings in Melbourne before former federal court judge Ray Finkelstein are due to begin on March 24.
A royal commission is also under way in Western Australia.
Maurice Blackburn’s lawsuit was filed in 2017 and was set to be heard in November 2020, but was delayed while the inquiry in NSW was running.
The trial is now due to start in October.
Crown declined to answer questions about the new allegations.
The law firm alleges Crown and some of its senior executives knew that Chinese authorities were cracking down on offshore gamlbing promoters in February 2015, more than a year and a half before the arrests of staff took place.
VIP gamblers from China were an important part of Crown’s business, making up about 12 per cent of Crown’s revenue in 2016.
Crown’s share price fell almost 14 per cent when the company announced the arrests on October 17, 2016.
Some of the allegations the firm has added to the lawsuit reflect evidence heard at the NSW inquiry, which found that Crown facilitated money laundering at the Melbourne and Perth casinos and that junket operators who brought in high-rolling gamblers were linked to organised crime.
However, others, including the allegation about codewords, have not been previously aired.
Lawsuit claims Crown flew into China under false reasons
Maurice Blackburn also claims senior executives and directors at Crown, including current chair Helen Coonan, who had survived a board purge spared by the NSW inquiry last month, knew about the arrests of employees of a South Korean casino group for illegal gambling promotion shortly after they happened in June 2015.
Shortly after the Korean arrests on July 9, 2015, a Crown employee named Xiong Bin, also known as Benny Xiong, was “questioned by Chinese authorities and accused of organising Chinese nationals to gamble in Australia,” Maurice Blackburn said.
Xiong was among 19 Crown staff later convicted of promoting gambling by a Shanghai court.
As part of Crown’s alleged efforts to conduct its business in China covertly, it gave Xiong a letter “for the purpose of provision to Chinese authorities following his questioning by Chinese authorities, which omitted reference to Crown’s casino business,” Maurice Blackburn said.
Crown also allegedly instructed “Crown employees to use codewords when discussing Crown’s China operations on telephone calls that took place with at least one employee in China.”
The company is also alleged to have mislead aviation authorities by “stating, on permits for flights in and out of China by Crown’s private jets, that the flights were for the purpose of Crown executives attending and returning from meetings in China, when those flights also, or instead, were for the purpose of transporting Chinese VIP gamblers to and from Crown Melbourne and Crown Perth.”
