Packer pulls rank over Melco sale, inquiry heard
A New South Wales government inquiry into Crown Resorts’ suitability to hold a casino licence in the state continued this week, where James Packer was alleged to have pulled rank over his proposed deal with Melco Entertainment.
The Brisbane Times reports that one of Packer’s key lieutenants has admitted he should have done more to investigate whether or not selling a $1.7 billion stake in Crown Resorts could jeopardise the group’s Sydney casino licence.
The inquiry heard on Monday that Mr Packer insisted on the agreement to offload a 19.9 per cent stake in Crown to Hong Kong group Melco, telling one of his executives: “It’s my life and I’m going to overrule you.”
The inquiry is investigating whether Crown’s agreement to sell 19.9 per cent of its shares to Melco breached its casino licence by giving Macau casino kingpin Stanley Ho an indirect interest in Crown.
Mr Ho and a list of associated individuals and entities are banned from being involved in Crown’s Barangaroo casino because of long standing alleged linked to organised crime.
Crown director and executive of Consolidated Press Holdings Michael Johnston told the inquiry on Monday he presented Mr Packer with a number of options to sell some or all of his 46 per cent stake in Crown in May last year.
By May 23, Mr Packer had settled on a sale to Melco, telling Mr Johnston via text: “Mike, it’s my life and I’m going to overrule you.”, the inquiry heard.
Mr Johnston told the inquiry he phoned Crown’s then-executive chairman John Alexander late on the night of May 30 to inform him of the Melco deal.
Mr Alexander had just stepped off a plane in Los Angeles, where Mr Packer lives, and “didn’t sound happy with the news.”
He said that was because the deal was a partial sale of Mr Packer’s shares rather than a full takeover of Crown, which Mr Packer had previously discussed with US casino group Wynn Resorts.
“Mr Alexander’s voice was very flat, which is understandable because if we had something like the Wynn transaction, he would have benefited quite handsomely under his executive remuneration plans, given he had share options,” Mr Johnston said.
Mr Alexander stood down as executive chairman in January following a series of reports about Crown’s partnerships with organised crime linked junket tour operators, but he remains a director of the company.
The inquiry heard Mr Johnston was aware that Stanley Ho had been involved with the Melco group of companies, stemming from Crown’s Asian joint venture with Melco, which it exited in 2017.
Despite that, Mr Johnston said he did not inform Crown’s management nor his fellow Crown directors about the sale so they could consider any potential risks to its licence, and nor did he investigate whether Stanley Ho was involved in Melco at the time.
Commissioner Patricia Bergin SC, asked Mr Johnston that given he knew the New South Wales government and state gambling regulator had been concerned about the Macau casino tycoon for many years, “wouldn’t it have been a very good idea to check whether Stanley did have an interest in Melco?”
“There was no suggestion that Stanley had any interest in Melco Resorts…based on our knowledge from that time, so there was nothing putting me on notice,” Mr Johnston said.
