Packer denies knowledge of China risks
The former Crown CEO admitted having considered a merger with Lawrence Ho’s Melco and “forgot” about Australian laws.
Australia.- Australian gaming billionaire, James Packer, has told a hearing that if he had thought Crown Resorts’ staff in China were at risk of being jailed, he would have pulled them out of the country.
He said whole VIP operation in China accounted for only 7 per cent of the company’s profit.
In 2016, 19 Crown Resorts’ officials were arrested for promoting gambling in China, where it is illegal. Packer said he didn’t know the employees had expressed fears of being arrested to management.
On Wednesday, the former director of Crown Resorts appeared once again before the Liquor & Gaming New South Wales inquiry, which is investigating whether the firm is fit to keep the casino licence for its AU$2.4 billion Barangaroo property.
Packer also told the hearing he “forgot” Crown was banned under Australian law from dealing with Hong Kong’s “king of gambling”, Stanley Ho, when he negotiated a part-buyout by Melco, a firm controlled by Ho’s son.
Packer acknowledged trying to sell one-fifth of Crown to Ho, even though his company had committed not to grant Stanley Ho any participation. He said he believed the company’s legal team would take care of any eventualities.
During the hearing, it was also revealed that talks between Crown and Melco began due to an inquiry on what Macau’s gaming regulators would do if Crown tried to merge with Wynn Resorts.
Packer was curious about the possibility of a Crown-Wynn merger, with him retaining 10 per cent of the shares.
Packer said he and Lawrence Ho, Stanley’s son, eventually dropped the idea and formed another agreement.
He said: “Lawrence was interested in doing something with Crown if we could make it work. He believed in the assets”, he said, according to IAG.
The former Crown CEO said he was flexible on the price for the deal since he was interested in reaching an agreement with Ho, and did not pay much attention to the regulations that prohibited it.
Melco finally acquired about 10 per cent of Crown and ended up selling its shares to The Blackstone Group. Packer still has a 37 per cent in Crown worth AU$2.2 billion (US$1.57 billion).
