The Australian Securities and Investments Commission (ASIC) will not pursue charges against 10 former Crown Resorts executives, though they were in charge during a longstanding era of non-compliance that led to money laundering and other breaches.
That decision has raised eyebrows among corporate governance experts like Swinburne University’s Helen Bird, who chastised ASIC for requiring “minimal accountability.”
According to Asia Gaming Brief, the commission took a hands-off position even as another government watchdog, the Australian Transaction Reports and Analysis Centre (AUSTRAC), began civil penalty proceedings against Crown for “serious and systematic” breaches of the law.
Speaking to the Australian Financial Review, Bird said, “This is part of a long-term narrative where the directors of major companies are not pursued … The stories change, we go from banking to casinos, but we still have the same issue.”
“On the face of it, these executives and directors have not shown proper care in their director duties,” said Elizabeth Sheedy, a professor at Macquarie University and an expert on executive accountability.
The fact “a number of those directors” have left Crown was “kind of like a partial acknowledgment that they have not been effective,” Sheedy added.
An ASIC spokesman said the body’s action—or lack of action—doesn’t mean the directors are absolved of responsibility.
“It is important to note that a decision not to proceed with a matter is not to make any finding of fact or liability one way or the other,” he said. “But rather, just that for what might be a variety of reasons—including the availability of admissible evidence and statute limits, considerations of the public interest and enforcement priorities—on balance, there was not sufficient merit in pursuing a particular matter.”
Meanwhile, a royal commission in Western Australia concluded its inquiry into Crown Perth on March 5; the probe will determine if Crown keeps its license in the Australian state. Three commissioners in Perth will present their findings and recommendations to the state government, which will make the decision on Crown’s suitability.
This is the third state investigation into the Australian operator, which was found unsuitable in both New South Wales and Victoria after probes revealed shocking lapses in corporate governance. In NSW, Crown is working to achieving suitability so it can open its new Barangaroo casino. In Victoria, a special administrator was appointed to oversee operations for two years.
AUSTRAC alleges Crown Perth and Crown Melbourne ignored their obligations under the Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Act 2006 following an investigation that began in October 2020.
Crown said its properties have cooperated fully with investigators, and in 2021 warned shareholders to expect financial penalties. Meanwhile, Crown’s troubles made it ripe for a takeover. The company’s management has recommended it be sold to U.S. investment group Blackstone.
Crown Chief Risk Officer Steven Blackburn concedes the company was guilty of many of the allegations brought by AUSTRAC, but added that the company has worked to remediate the problems.
“A lot has happened in the last 12 months at Crown,” Blackburn said. “Among other things, we’ve established and implemented a risk program to uplift our entire approach to risk management. We’ve established and implemented a comprehensive financial crime and compliance change program. We’ve implemented enhanced controls to manage the risk of financial crime. And we’ve launched a new AML/CTF program as well as an enterprise-wide risk assessment.
“That’s a step in the right direction, but it also acknowledges that this team has been working to get us to where we are today, which is a great deal ahead of where we were.”
