Crown likely to make further board changes
Analysts believe Crown Resorts will offer to make further changes to its board and management in an attempt to satisfy Victoria’s Royal Commission.
Australia.- With Crown Resorts facing a possible loss of its Melbourne gaming licence, analysts expect it to offer to make more changes to its board in a bid to satisfy Victoria’s Royal Commission.
Tomorrow (Tuesday), the company will have to argue why it should continue holding its casino licence.
Helen Bird, a lecturer on corporate governance at Swinburne Law School in Melbourne, said: “What we have seen is a lack of confidence in the board, as it currently exists, to make changes necessary for the company to turn around. The current board, as it stands, has no prospect of continuing.”
Adrian Finanzio, the counsel assisting Victoria’s Royal Commission into Crown Resort has told the inquiry that the casino operator should lose its licence. He questioned the conduct of Xavier Walsh, Crown Melbourne’s chief executive, as well as that of former executive chairman, Helen Coonan.
Finanzio said they were not appropriate people to remain connected to the Crown Resorts
He said: “Walsh partially disclosed the existence of the issues to other directors, downplayed the significance of the issue to Crown’s lawyers, and never followed up the matter in any meaningful way.”
He told former Federal Court judge Raymond Finkelstein, who’s leading the inquiry, that if he decides Crown Melbourne should hold its licence, it must be “placed under strict supervision and should not be left to its own devices to implement reform.”
The judge leading the inquiry was originally due to release his report by August 1, but Finkelstein has ordered an extension to the inquiry up to October 15.
In July, Crown Resorts’ lawyer Leon Zwier wrote a letter to the Victorian gaming minister Melissa Horne warning that 12,000 jobs would be at risk if Crown is unable to retain its gaming licence. The letter also noted that the casino operator wouldn’t comply with its lending covenants which total $700m if it loses the licence.
Zwier wrote: “This will impact Crown’s shareholders, employees, unions, trade creditors, patrons, the hotel precinct, and the Melbourne tourism industry.”
Raymond Finkelstein said the letter made it seem Crown Resorts wanted to “make sure that the commission doesn’t make a particular finding.”
Star Entertainment Group withdraws offer for Crown Resorts
Star Entertainment Group has withdrawn its offer to buy Crown Resorts. In May, Star Entertainment made an unsolicited non-binding offer of AU$12bn (US$9.4bn) for the casino operator.
Star Entertainment said: “Issues raised at Victoria’s Royal Commission into Crown Melbourne have the potential to materially impact the value of Crown, including whether it retains the license to operate its Melbourne casino or the conditions under which its license is retained.”
Although Star Entertainment has withdrawn its offer, it said it would remain open to exploring opportunities with Crown. It said it would continue to closely monitor the Victorian Royal Commission and Western Australian Royal Commission.
