Former Crown Resorts boss John Alexander has been quizzed about his relationship with the company's largest shareholder during today's Perth Casino Royal Commission.
Former Crown Resorts boss John Alexander has told the Perth Casino Royal Commission he did not care to inquire about the nature of a $50,000 deal fellow director John Poynton held with Crown’s largest shareholder James Packer.
Mr Poynton struck the $50,000 a year consulting agreement with Mr Packer’s Consolidated Press Holdings around May 2018 after he replaced Mr Packer on the board of Crown Resorts.
The agreement required Mr Poynton to give confidential information about the Crown business to Mr Packer.
Mr Alexander told the commission despite knowing about the retainer, he did not care to read it or inquire about its terms because he did not envisage it containing anything that would present a conflict of interest or be “prejudicial” were Mr Poynton to assume a position on the board of Crown Resorts.
“For me, this was a Consolidated Press Holdings matter,” he said.
“I didn’t think a great deal about it, to be honest.
“I thought it was a relatively small amount of money, as a retainer.”
He rejected the assertion that he may have refrained from making inquiries because his first loyalty was to Mr Packer, with whom he has shared a long friendship, and said he had assumed it would be something Mr Poynton would have had to declare with the Crown board.
Mr Alexander served as the chief executive and executive chair of Crown Resorts until January 2020, when he stepped down following a board reshuffle.
He remained on the board as executive director during a period of transition until his retirement in October 2020.
The Bergin report concluded that Mr Alexander’s time as chairman of the board and chief executive led Crown to “disastrous consequences”, including processes that exposed its directors to conflicts of interest and remote management by Mr Packer and a failure to protect Crown’s casino licensees from organised crime and money laundering.
It deemed his own perception of his relationship with Mr Packer to be “either blind to the reality or lacking in candour” and stated that it was hard to think of “anyone more loyal” to Mr Packer.
The vast majority of today’s Royal Commission hearing centred around further probing Mr Alexander’s relationship with Mr Packer, Crown’s structure, the chain of command, and the company’s reporting lines.
Mr Alexander conceded that he had no qualifications or training regarding the oversight of casino operations prior to his appointment in 2004, with the vast majority of his prior experience in media.
He told the commission that his understanding of risk identification in relation to casino operations was acquired “on the job” and that he did not gain an appreciation of the degree to which casinos were vulnerable to infiltration by organised crime syndicates until “sometime” after his appointment.
The commission heard that there was no formal process for the appointment of Mr Alexander when he replaced James Packer as chair of Burswood Limited in August 2016.
He said his appointment had been recommended to the Burswood Limited board, but could not recall who had made that recommendation.
“There was no formal process,” he said.
“As I was the long-time deputy chairman, I don’t think that was a particular surprise.”
Despite it being a wholly-owned subsidiary of Burswood Limited for the duration of his tenure as director, Mr Alexander admitted he was unaware of the existence of Riverbank Investments – an entity used by organised crime groups for money laundering until media reports surfaced in August 2019.
When asked to explain why he had not inquired about the corporate structure beneath Burswood Limited and Crown Resorts, he said there was “no cause to do so”.
“As I explained to the Bergin Inquiry, I became a director of 60 plus odd companies, most of those companies were explained to me to be shell companies sporting tax and financing structures,” he said.
“I joined the boards of eight WA-based companies as part of that process.
“There were no red flags or indications when I signed those vast groups of proprietary companies that there were any issues.
“I only became aware of the issues at Riverbank when I read the article in The Age newspaper in August 2019 and then I started asking questions.”
Mr Alexander was also quizzed about the company’s International Commission Business, known as ICB.
He said he could not recall the Perth Casino hosting a $2.75 million wedding for friends of a junket operator, nor could he recall the company subsidising it to the tune of $950,000.
The wedding was subsidised on the assumption that its guests would be gambling at the company’s Perth and Melbourne casinos, but made a significant loss.
The commission was told that Crown Resorts Group purchased private jets to transport players, particularly for Perth given the infrequency of flights from Asia; a purchase Mr Alexander said was suggested and approved by the Burswood Limited board.
When asked about the rationale for hosting the functions, given the high costs and low margins, Mr Alexander said the company was hopeful Chinese visitation would continue to grow.
“Clearly the appetite for remaining in this business [ICB] began to evaporate very quickly,” he said.
“It required so much in terms of resources in terms of attracting luxury, high-end customers.
“The absence of a customer base is obviously now an issue, not just because of COVID-19.”
“As a company, as a country, we’re far more aware of the risk now.
“We had committed a lot of resources and, until 2015 and 2016, there was a belief that Chinese visitation was going to continue to grow and an expectation that volumes would increase.”
Like several witnesses before him, Mr Alexander was questioned about the frequency and length of Burswood’s board meetings, with minutes from the quarterly meetings between 2009 to 2020 confirming some were as short as 26 minutes.
Mr Alexander said there was never a “quest” for more meetings because he did not believe they were required, as he received information in and around board meetings.
While acknowledging the size and complex nature of the company’s operations, he said the board packs reflected that.
“I don’t equate the length of time of a meeting to the quality of the meeting,” he told the commission.
