Regulatory non-compliance led to a contentious annual general meeting. Finally, the Australian Crown Resorts lost two of its directors.
Crown Resorts announced the imminent retirement of two directors John Alexander and John Horvath. The names of both of them were tarnished in the recent inquiry of New South Wales Independent Liquor and Gaming Authority (ILGA). The inquiry was made to see the suitability of the Crown Resorts to hold the state-gaming license for the Crown Sydney property.
Horvath was eyeing for re-election at the Crown’s AGM on Thursday. However, investors holding 31.3% of stake voted against him. John Halton received 24.8% against a vote for his re-election and Guy Jalland received 41.4%.
However, they were saved by James Packer who controls 36% of Crown’s stock. Horvath apparently understood that most of the investors want him gone but Jalland and Halton want to cling on to the roles based on the voting clout of John Packer.
The executive remuneration report of Crown received 34.3% against a vote by the investors as well in another shock to the senior leadership.
Under the Australian rules, if a remuneration report sees more than 25% against the vote, a process would start and that could lead to the re-election of the entire board.
Helen Coonan, Crown Chair, has addressed the shareholders and said that Crown is facing adversity like never before. Coonan has also apologized for the numerous governance and risk management failings and vowed no tolerance. The Chair however rejected the notion of non-seriousness about AML compliance.
Crown has already ended all dealings with Junket operators after reports of rampant AML failures at Crown Melbourne. The dealings could only start after extensive consultation with the regulator with a significantly increased due diligence process.
According to CEO Ken Barton, a number of senior roles including Compliance & Financial Crimes, Culture & Human Resources, Internal Audit, and VIP Operations are ready to be filled again.
Barry Felstead, the CEO of Australian Resorts of Crown faced heavy criticism during the inquiry by ILGA. Felstead approved claims Crown made in newspaper ads regarding vetting of junket partners. It was later proven to be inaccurate though. Felstead will step down from the position and the CEO Australia Resorts position has not been retained in the new structure.
Crown Melbourne has not opened yet due to restrictions of Pandemic. However, Crown Perth has resumed full operations with the almost entire staff.
Mass Market gaming revenue of Crown Perth was up by 16% from July to October on a year-on-year basis. However, VIP gambling was shattered due to travel restrictions and new VIP scrutiny of the Crown. The non-gaming revenue was down by 21%.
Wagering and online social gaming revenue increased by more than one-third.
Crown Sydney is on track to be opened in mid-December, provided ILGA does not recommend revocation of the state license.
The fate of Crown Melbourne is however hanging in uncertainty as two regulators are probing into VIP gambling shenanigans.
Source: https://calvinayre.com/2020/10/22/casino/two-crown-resorts-directors-walk-plank-shareholders-revolt/