Today's Perth Casino Royal Commission hearing has unearthed the conflict between Burswood Limited director Maryna Fewster and former Crown Resorts director John Poynton, who delivered contradictory testimonies.
Today's Perth Casino Royal Commission hearing has unearthed the conflict between Burswood Limited director Maryna Fewster and former Crown Resorts director John Poynton, who delivered contradictory testimonies.
Ms Fewster told the commission she felt ignored after raising concerns about the way the board was being run in a period of “crisis”, with sloppy board agendas, infrequent meetings and an inability to provide real oversight of Crown Perth’s operations.
As the second day of the royal commission hearings got under way today, Ms Fewster, who has also served as Seven West Media WA chief executive since May 2018, told the commission she raised concerns with Mr Poynton and executive chair Helen Coonan about the way the board was being run.
She described fears the board was becoming one full of executive managers and said she felt uncomfortable with the way in which Crown Resorts Perth chief executive Lonnie Bossi had been appointed. She said he had not been formally appointed by the board, she had not seen his employment contract, and had no knowledge of his KPIs.
“There was no discussion,” Ms Fewster told the commission.
“It was like ‘we’re appointing these people to the board to have a quorum’.
“In light of the royal commission being called, I felt completely uncomfortable with Mr Bossi’s appointment.
“The concerns I had were not necessarily towards Mr Bossi, but I was concerned, at the time, that it was becoming a board of executive managers.
“It [2020] was an unusual year, and a difficult year for Crown.
“Coming out of the Bergin inquiry, and especially coming into 2021, it became clear that things weren’t where they needed to be and that appointing more management to the board wasn’t going to get us there.”
Ms Fewster also voiced her frustrations with the lack of organisation and structure of the board’s meetings, revealing that the board went four and a half months without sitting earlier this year, only to do so in April with a “sloppy” board agenda delivered 48 hours before the meeting.
At the time, Ms Fewster said she expressed serious concerns about the delay in convening a meeting; a meeting she said should have been held as a matter of urgency given the company was in a period of crisis.
She said she also took issue with the frequency of the meetings and their duration, some which lasted as little as an hour.
Ms Fewster claimed she contacted Mr Poynton before his departure regarding her concerns and assumed they would meet as a matter of urgency.
She claimed she was not, however, afforded that meeting and that Mr Poynton left shortly thereafter.
Those claims contradict the evidence given by Mr Poynton yesterday, who said he did not recall Ms Fewster complaining about any lack of information or the duration of board meetings.
“In my experience as an executive, when a company goes through a period of crisis, as Crown has, you would usually see activity lifting in terms of meetings, schedules, tasks, and dates - a heightened level of activity,” Ms Fewster said.
“But, in my experience, since December 2020, it has been a complete vacuum until after eight requests of a board meeting and with a substandard board pack that arrived less than 48 hours before the meeting.
“That’s why I asked Helen Coonan about this - it is not reasonable to expect a non-executive director to deliver on their activities in these circumstances.
“If I was taken seriously, I think there would have been a total overhaul of the operation."
Ms Fewster said she then took her concerns to Mr Bossi, but received no information or updates on anything relating to remediation after the Bergin Report.
She also conceded that, for the most part, the meetings focused on the financial results and the chief executive’s report and that internal audit, legal risk and compliance reports were typically “taken as read”.
She said the crux of the issue was the structure of the Crown business, which she believed was not fit for purpose.
“It is just not possible to be a diligent and good director when you are not provided information, and be part of the solution,” she said.
“For me to discharge my duties, I need to get my board pack in a reasonable time, with clear information.
“The April [board] pack was the last pack I could read. I thought, am I noting this? Do I need to make a decision with this?
“What am I doing with this? What is it saying to me?
“It’s the first board pack I’ve seen with no matters arising and I don’t know how you keep track of what people are doing and dates to when things are due.
“It’s a necessary measure to keep the company on track and the management focused.”
Ms Fewster told the commission that the board’s function was supposed to be providing governance, strategic direction and oversight of the commercial operations and management of Burswood Limited, but that the current arrangement did not facilitate that.
“I feel we should be responsible for that [Crown Perth and all of the entities underneath] and what happens in Perth,” she said.
“When you look at how the board is structured and operates, there is no way we can do that - it doesn’t translate to how the business is run.
“Mr Bossi should also be accountable to the board, as CEO, that looks after governance, but it is aspirational - absolutely.”
She conceded that the remediation of the issues at Crown would be a “huge task”, and one that would require the reconsideration of the company’s structure.
The hearing continued this afternoon.
The hearing marked day two of the second phase of the inquiry, which seeks to determine the suitability of the Perth Casino licensee.
Crown Perth’s former director of 13 years Tim Roberts is expected to be called tomorrow.
Fewster, Poynton:
Ms Fewster’s testimony came one day after Mr Poynton told the inquiry that he took the initiative to upgrade board meetings at Burswood Ltd (aka Crown Perth), after he became chair of the company.
This included more detailed briefings from parent company Crown Resorts Ltd (CRL) and increasing the frequency and duration of meetings.
Mr Poynton said the change was made especially to help Ms Fewster, as she was new to the Burswood Ltd board and did not have the same access to information on Crown Resorts.
”I thought that particularly for Ms Fewster, who is a relatively recent appointment to the board, that whilst I was able to get quite a lot of information from my role as a non-executive director of CRL, she was not in that same position," he said.
“So it seemed to me that providing her with that additional overview would be helpful.”
Counsel assisting the inquiry asked Mr Poynton if that was a reaction to complaints Ms Fewster had made about the length of board meetings and the frequency and amount of information that was being provided.
“I recall it being my initiative,” he said yesterday afternoon.
“I don't recall Ms Fewster complaining about any lack of information or the duration of board meetings.”
Mr Poynton said his appointment as chair, in January 2020, was followed shortly after by the first COVID shutdowns.
“Whilst I think there were five board meetings with me as chair, there were complications around actually physically meeting,” he explained.
“So I was keen to have more frequent meetings, particularly during a period where the company was facing so much issues on so many fronts, including the operational issues around COVID.”
Mr Poynton said his decision was mainly in response to newly emerging issues across the Crown Resorts group, but also reflected a long-held concern that board meetings at Burswood Ltd had not been long enough or sufficiently detailed.
“This was more making sure that everyone was comfortable, that there was an opportunity to discuss everything.”
In yesterday's hearings, counsel assisting asked Mr Poynton if he ever have any concern when he got to board meetings that he had not had sufficient opportunity to consider relevant matters.
He said this was not the case.
"I mean, I think the secretariat part of Crown, Burswood Ltd was actually quite effective at getting robust board packs to the directors in due time so that there was sufficient time to both read the packs and then enquire ahead of the meeting about things that might not have been clear that might well then have taken less time to discuss during the meeting."
Yesterday’s hearings also focused on a consultancy agreement Mr Poynton signed with James Packer’s private company CPH Pty Ltd, which is the largest shareholder in Crown Resorts.
This was signed in 2018 when Mr Poynton replaced Mr Packer on the board of Crown Resorts.
He said the purpose was to make clear he was a CPH nominee on the Crown Resorts board, rather than an independent director.
“The idea of entering the consultancy was Mr Packer’s,” he explained.
“That's what he wanted to do and I agreed.”
Mr Poynton was paid a fee of $50,000 for the consultancy, on top of his board fees at Crown Resorts (circa $120,000) and Burswood Ltd (circa $80,000).
The consultancy agreement included several clauses that related to Mr Poynton passing information or returning property to CPH.
One referred specifically to providing confidential information on demand.
“Why did you agree to that term?” Mr Poynton was asked.
“I'm not sure, in hindsight,” he answered.
“What I would say is it never happened.”
Mr Poynton acknowledged the clause provided potential for a conflict of interest between his multiple roles but insisted he never provided any confidential information to CPH.
He added that Mr Packer did not make any demand for confidential information.
Mr Poynton said NSW’s Bergin inquiry had already assessed this matter.
“As I said, for the record, the Bergin inquiry looked at every piece of correspondence, text, email, whatever other, to determine what information had flowed from CRL directors to CPH and Mr Packer. And in my case there was none.”
The Bergin report did not make any adverse findings against Mr Poynton.
Next week, various current and former executives of the Crown group will also be questioned, including Crown’s chief legal officer Joshua Preston, Mr Bossi, senior executive Claude Marais and executive Barry Felstead.
The second phase of the inquiry is expected to be conducted in four two-week blocks, the first of which will focus on corporate governance and operations of Crown Group’s Perth entities, issues affecting the suitability of those entities, matters outstanding from the May hearings and remediation efforts.
The commission hopes to complete the hearings by mid to late October, with closing statements by mid-December and a final report to be delivered by March 4 2022.
