Crown Resorts chair Helen Coonan has questioned the work of three of her top executives as she sought to defend the gaming company’s board over its own performance.
Crown Resorts chair Helen Coonan has questioned the work of three of her top executives as she sought to defend the gaming company’s board over its own performance.
Appearing before a NSW Independent Liquor and Gaming Authority inquiry, Ms Coonan was presented with voluminous evidence that Crown’s junket programs have been used to facilitate money laundering by groups with links to organised crime.
In one case, the junket operator in the Suncity Room in Crown Melbourne was told it could have no more than $100,000 in cash but was found in April 2018 to have $5.6 million in cash.
Today's hearings followed evidence in recent weeks showing multiple failures in governance and risk management.
Ms Coonan was asked today whether she still had confidence in long serving Perth-based executive Barry Felstead, who was chief executive Australian Resorts.
The question came just days after she revealing that Mr Felstead’s position had been made redundant, and that he would retire later this year.
"Mr Felstead has been with the company for a number of years, and he has done very many good things," she said.
"I’d be personally very disappointed at how this has all played out, but the decision about whether or not I have confidence in him has been cured, because he has elected to move on."
“But did you lose confidence in him?” counsel for the inquiry asked her.
“Well I don’t have confidence in him to continue,” Ms Coonan replied.
The inquiry has heard that Mr Felstead had information about the security of staff in China, ahead of the arrest of 19 staff in that country in 2016.
He passed information to one director, Michael Johnston – who notably has been backed by Ms Coonan – but did not inform the entire board.
Ms Coonan was also asked today about a second Perth executive, chief legal officer Joshua Preston, who has already been criticised by other directors.
“I think Mr Preston might be in a slightly different category,” she said.
“He was wearing a lot of hats.
“We need to understand that he may have had too much to do.
“I wouldn’t want Mr Preston to be continuing in the prominent roles he had but I wouldn’t preclude the fact there might be some part of the business were Mr Preston might be suited and able to continue.
“I don’t know, but I would be, of course, keen to know Mr Preston’s views, it may be that he doesn’t wish to go on.”
Mr Preston, along with Mr Felstead (who was much more senior) and Mr Johnston (who was on Crown’s board as well as being finance director of Consolidated Press Holdings, the private company of Crown’s major shareholder James Packer) had responsibility for approving junket operator relationships.
Ms Coonan was supportive of Crown chief executive Ken Barton but he was not immune from criticism.
“I’ve been disappointed in some of the judgements made by Mr Barton that I’ve become aware of in the course of the hearing,” she said.
“However I think Mr Barton has shown a keen appreciation of the need for change.
“He has worked diligently and carefully with me and the board to be able to outline what needs to change.
“I think he is the best person to be able to drive those together with board supervision.”
Mr Barton has been with the company for 10 years but only held his current job since January.
Ms Coonan agreed there have been shortcomings in the company’s compliance standards.
Asked by counsel whether the board should take responsibility, Ms Coonan sought to deflect responsibility.
“It’s a complex matter because the board can set a proper risk appetite, it can have a proper strategic direction but there can be failings in how it is implemented,” she said.
“I think that is the issue here.”
Ms Coonan told the inquiry, which is assessing Crown’s suitability to hold a licence for its new Barangaroo casino, that the company planned to change its approach.
“We have signalled, and we will be signalling in the clearest of terms, that we are all about a culture of compliance and we are investing in people with the right attitudes and the right skills,” she said.
Crown has previously disclosed that it has suspended all activity with junket operators until June 2021 while it undertakes a review of its processes.
(This activity halted anyway because of COVID travel restrictions.)
It is also seeking to fill the newly created role of head of compliance and financial crimes, which will report directly to the board.
Today’s hearing came one day after Crown revealed its Melbourne casino was under investigation by AUSTRAC for breaches of money laundering laws.
And it came one week after the Victorian Commission for Gambling and Liquor Regulation issued a show cause notice to Crown Melbourne Ltd.
The notice requires Crown to show why disciplinary action should not be taken in relation to alleged non-compliance with its internal controls for junket operations.
WA’s gaming regulator has told Business News it is monitoring developments at Crown.
