Counsel for a Royal Commission inquiry into Crown Resorts in the Australian state of Victoria has recommended that the company be stripped of its Melbourne license as the problems run too deep for corporate reform.
In his submission to the inquiry Adrian Finanzio SC said it was not a recommendation that had been made lightly and that he was fully aware of the significant disruption that cancellation may cause to the city of Melbourne, where the casino is located.
While cancellation is not the only option, he recommended that the seriousness of Crown’s conduct to date must be a “central, important and weighty factor.”
Crown Melbourne, the company’s flagship property, is the largest employer in the state with more than 12,000 employees.
The findings of the commission go one step further that the Bergin Inquiry in New South Wales, which wound up in February. After months of damaging testimony, including an admission that money laundering had occurred at the Crown Melbourne property, the probe found it was unsuitable to hold a license in Sydney. However, it left the operator a path to regain suitablity with significant corporate restructuring.
“Notwithstanding the extensive program of reform proposed by Crown there remains a proper basis for concern about the detail of the plan, the capacity of Crown to implement it, or the time for delivery, leaving it open for this commission to find that the program of corporate rebirthing that is underway is insufficient and so uncertain as to lead this commission to the conclusion that there is a sufficiently clear pathway to suitability,” Finanzio said.
He said the conduct of Crown had been flagrant and well-publicized and was rooted in a corporate culture that put profit ahead of all other considerations.
The recommendations of the counsel must be considered by the judge overseeing the commission inquiry.
Crown has undergone a significant overhaul of its board and management team and stopped working with junkets in its attempts to regain suitability to run its new property in Sydney. The Barangaroo resort opened in December without its casino.
The company is also subject to a third Royal Commission inquiry in Western Australia as well as increased scrutiny from Australia’s financial crimes watchdog, Austrac.
The extent of the misdoings at Crown has shocked public opinion in Australia and also put the spotlight on the effectiveness of regulation, with calls for a drastic overhaul.
Crown itself is also considering a merger option from its rival Star Entertainment Group, which some had said may be the best way to suitability. It’s unclear what Tuesday’s recommendation will have on that proposal.
