Crown Resorts’ stocks slipped after Adrian Finanzio, counsel assisting Victoria’s Royal Commission, said Crown Melbourne should lose its casino licence.
Australia.- Crown Resorts’ share price has fallen after Adrian Finanzio, the counsel assisting Victoria’s Royal Commission, told the inquiry the casino operator should lose its licence for Crown Melbourne.
Crown shares fell by 1.7 per cent in trading on Wednesday and are down more than 22 per cent since May.
Finanzio said that evidence against Crown Melbourne showed “serious misconduct, illegal conduct and highly inappropriate conduct, which has been encouraged or facilitated by a culture which has consistently put profit before all other considerations.”
He said the company had put profits above legislative requirements and could owe the state AU$480m (US$351.4m) in unpaid taxes. Crown CEO Steve McCann has suggested that the tax underpayment stood at around AU$8m, but the figure could be significantly higher.
Finanzio also said that Xavier Walsh, Crown Melbourne’s chief executive, and former executive chairman, Helen Coonan, were not appropriate people to remain connected to the casino operator.
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.”
Some analysts have suggested the company should maintain its hotel and entertainment businesses and allow a third party to manage the casino venue.
Finkelstein was originally due to release his report by August 1 but has ordered an extension to the inquiry up to October 15.
Could a possible merger with Star Entertainment be the solution?
One option for Crown could be to accept one of the offers from its potential suitors.
In May, Australia’s The Star Entertainment made an unsolicited non-binding offer of AU$12bn (US$9.4bn) for Crown Resorts. Star Entertainment said the fusion would deliver between AU$150m to AU$200m of cost synergies per annum with an estimated net value of AU$2bn.
Oaktree Capital Management has also made an offer to acquire Crown Resorts. The company proposed an AU$2bn private loan and an AU$1.1bn loan convertible into new shares to be issued by Crown. In May, another bidder, Blackstone, upped its original bid from AU$11.85 cash per share to AU$12.35.