Crown Perth set up questioned at royal commission

Crown Perth’s management structure, where a local board and the ASX-listed company’s central governance is a “legacy issue”, according to director-elect Anne Ward.

The Australian Financial Review reports that while appearing before the Perth casino royal commission into the gambling company, Ms Ward said she viewed Crown Resorts and its various casinos as a single company and “hadn’t thought about” differences between the concerns faced by each site.

This is despite inquiries in WA, New South Wales and Victoria all questioning whether Crown’s central management of its casinos in each state complies with its licensing requirements.

Victorian royal commissioner Ray Finkelstein even broached the prospect of ordering Crown’s Melbourne business be spun off from the parent, though he did not ultimately make this recommendation and has called for the state’s casino to have its own independent directors.

The WA inquiry is examining whether Crown Resorts’ ownership of the Perth casino was in the state’s best interest, asking whether divided loyalties or conflicts arise within the “large corporate group” to the detriment of Crown Perth.

Ms Ward’s comments followed testimony from Crown chief executive Steve McCann, who cited scale, shared expertise and greater investment potential as benefits of centrally managing the three casinos.

Switkowski defends Crown’s governance structure

Crown chairman-elect Ziggy Switkowski also stood by the practice, telling the commission that state subsidiaries having their own boards and chief executive officers subject to oversight from a central overarching company board was a “fairly conventional” structure.

Ms Ward said she viewed the company as a single entity with shared concerns, but then admitted she had received scant training or briefing on issues specific to the Perth site.

Citing the fact she was still “in learning mode”, Ms Ward was only appointed to the board in September and is still awaiting regulatory approval in all three states, the Redbubble chairwoman said she had not received any training regarding money laundering or responsible gambling risks specific to Perth, despite these issues coming up repeatedly at the WA royal commission.

Instead, she said she had “a training session specifically focused on the corporate structure and governance arrangements in Perth” and a meeting with Crown Perth chief executive Lonnie Bossi.

Mr Bossi previously testified that key business decisions about the Perth casino were made by Crown Resorts rather than the local Burswood brand.

Ms Ward also said she believed boards needed to be visible within an organisation, but did not think the fact that most Crown executives and directors lived on the east coast would prevent this occurring in Perth.

Crown Perth’s autonomy from wider group called into question

Crown non-executive director Nigel Morrison was also grilled by the royal commission on how much autonomy Crown Perth had within the Crown Resorts conglomerate.

Asked by counsel assisting Michael Feutrill, SC, whether the WA casino deployed different anti-money laundering and counter-terrorism financing and responsible gambling policies to Melbourne, Mr Morrison was doubtful.

“My expectation would be no,” he said.

“The anti-money laundering and counter terrorism financing is a national legislation, so it applies equally to all operations in Australia. And responsible service of gaming, I guess, maybe it would be different in terms of the other specific requirements.”

Mr Feutrill then pressed Mr Morrison on whether Crown Perth had the power to change policies that better suited its casino.

“I would imagine the board of Crown Resorts would have dialogue with the Perth casino board members and seek to understand, and if I was right then it would be accepted,” he said.

Mr Fuetrill then asked whether Mr Morrison agreed that Crown Perth, as a wholly owned subsidiary of Crown Resorts, was not “functionally independent” of the parent company.

“I would agree with that. I don’t see why it needs to be independent of Crown Resorts Limited,” he said.