Crown Resorts Executive Chairman Helen Coonan has told a Royal Commission into the suitability of Crown Melbourne to retain its Victorian casino license that the companys board had been deeply divided on the appropriate strategy to adopt ahead of a similar inquiry held in NSW last year.
Providing testimony during a lengthy grilling by Counsel Assisting, Adrian Finanzio, on Thursday, Coonan said meaningful change within Crown Resorts was not widely considered until she was appointed Chairman following the departure of John Alexander in February 2020.
However, she insisted that a handful of directors had expressed concerns over Crowns response to media allegations around money laundering and the companys dealings with Chinese junket operators in mid-2019. Those allegations, which ultimately prompted last years Bergin inquiry in NSW, saw Crown take out a full-page advertisement in newspapers describing the media reports as a deceitful campaign of poor or misleading journalism. The Bergin inquiry ultimately found Crown unsuitable to hold a license for its AU$2.2 billion Crown Sydney development until it met key governance and compliance criteria.
Asked by Finanzio for her thoughts at the time on Crowns defensive and combative strategy, Coonan said, I think it is very important that you get the right strategy and the strategy around the Bergin Inquiry and how that developed was very much challenged by me and others on the board. We became increasingly concerned about the strategy that was being adopted.
Coonan said the 2019 media reports had shone a light in some very dark places, adding she suspected at the time that information from senior management at Crown Melbourne may not have been as forthcoming to the Board as it should have been. Similar concerns were raised in an interim report from the Victorian Commission for Gambling and Liquor Regulation (VCGLR) later that year, with Finanzio questioning why the Board had then decided to issue a defensive response to the allegations rather than launching an internal investigation into the lack of information coming from management.
There were some collective concerns raised in the VCGLR report and the Board tasked the then Executive Chairman, Mr [John] Alexander, to go away and make some investigations of management in relation to those particular matters, Coonan replied.
She disagreed with an assertion by Finanzio that having Alexander investigate rather than calling an independent investigation was the point at which Crown had adopted a defensive position in relation to the Bergin inquiry.
I dont think we did, Coonan said. It was more once notices started to issue and documents were called for [by the Bergin inquiry] that attention was given to the strategic direction of how Crown would present.
However, she insisted that certain directors namely herself, Jane Halton, Toni Korsanos and John Horvath had disagreed with the strategy Crown had adopted on the advice of its legal team. Notably, Coonan, Halton and Korsanos are the only directors to have survived the Bergin Report with five other directors plus CEO Ken Barton and General Counsel Mary Manos all stepping aside since February.
Some of the Board started to get very concerned about the strategy and how that all unfolded, and it really escalated when we started thinking about the response to the Bergin [inquiry], she said Thursday.
It was down to the end of 2019 and into 2020 that there was really momentum on the part of some of the directors to start looking at some changes to the company, including when I became the independent chair and Mr Horvath the deputy chair in early 2020. That was the point around which I was able to start thinking critically about our legal advice and our strategy around the Bergin inquiry.
Coonan, acting as Executive Chairman on an interim basis since February, has been working closely with NSW regulators to get Crown back to suitability.