Crown Resorts Executive Chairman John Alexander has resigned amid a major shakeup of the company’s senior executive team.
Alexander announced his departure on January 24. He has been replaced by Crown Chief Financial Officer Ken Barton, who will assume the role of CEO and managing director. Former Liberal Party politician Helen Coonan has been appointed as chairwoman of Crown, with non-executive director Professor John Horvath named deputy chair.
Other changes include the appointment of individual chairs for each of Crown’s three properties in Melbourne, Sydney and Perth. They are former AFL boss Andrew Demetriou as chairman of Crown Melbourne Ltd., Jane Halton AO PSM as chairwoman of Crown Sydney Gaming Pty Ltd., and John Poynton AO as chairman of Burswood Ltd.
The reshuffle occurred as the New South Wales Independent Liquor & Gaming Authority launched an inquiry into Crown’s suitability to hold a gaming license for its Crown Sydney development. Regulators specifically are looking at the proposed AU$1.2 billion (£626 million) sale of 19.99 percent of the company to Melco Resorts & Entertainments, the Hong-Kong based group run by Macau casino billionaire, Lawrence Ho.
The Sydney Morning Herald called the timing of the executive changes “curious” and “anything but conventional,” occurring as they did in the first week of an inquiry in which Alexander must testify. The publication also questioned Alexander’s continuing place on the company payroll, reportedly at $3.5 million per year with the potential for bonuses.
At issue in the inquiry are reports that Crown failed to alert regulators to the sale of shares to Melco before the deal was announced publicly, and the potential that the deal may have breached the terms of its NSW casino license. Melco Chairman and CEO Lawrence Ho, a longtime friend and former partner of Crown chief shareholder James Packer, is the son of Stanley Ho, legendary Macau gaming kingpin, who has long been linked to Chinese organized crime. Ho fils has repeatedly distanced himself from his 98-year-old father and his business dealings.
“Alexander stepping down is not a good thing, but the greater problem that they do seem to have is all the issues related to the sale to Melco,” Dale Raynes, associate director at CPS Capital, told Reuters. “They needed to tighten the ship and prove that they have the relevant management in place.”
Packer froze the stake sale to Melco last year due to the probe into alleged criminal activity at Crown’s Australian operations following media allegations that it had engaged in money-laundering, breached gambling laws and partnered with tour operators linked to organized crime. Crown has denied the allegations.
Hearings are due to resume in late February and lawyers leading the inquiry said Packer himself would be called to give evidence.
Crown has endured several major setbacks in recent years, including the 2016 arrests of 19 employees found promoting gambling in Mainland China, a violation of Chinese law. Those employees were jailed for months in a Shanghai jail before being released and deported. The company was also the subject of explosive media reports last year alleging links to Asian criminal syndicates. Crown has seen a big drop in spending by Chinese tourists, which contributed to a 4.7 percent decline in its annual profit last year.
The China incident led in December 2017 to a class action being filed against Crown Resorts on behalf of investors claiming they had suffered losses due to the group’s share price having been hurt, reported GGRAsia.
Rowen Craigie, who had been the Crown Resorts’ CEO and managing director during the China episode, stepped down in February 2017, after 23 years of service with the group, to make way for Alexander. Alexander’s replacement, Barton, was CEO for Crown Digital as well as group CFO. Alexander said Barton’s “longstanding role with the company and his experience as Crown’s chief financial officer will provide continuity through this transition.”
Crown and Melco had a previous relationship with Melco in Macau and the Philippines when Packer, the majority shareholder in Crown, formed a partnership with Ho. Packer and Crown exited the company several years ago. It’s thought that Melco’s proposed increased equity in the company will be a precursor to a total takeover down the road.
Crown Resorts runs Crown Melbourne in Victoria; Crown Perth in Western Australia; and is building a third resort, Crown Sydney, in New South Wales.
