Some Of The Biggest Names In Corporate Australia May Be At Risk In The Crown Scandal
The last few days brought forth a series of shocking revelations as the Crown Casino scandal came to light. The most outrageous part of the expose was the involvement of the high and mighty of Corporate Australia. The Casino was allegedly fast-tracking visa applications for the wealthy Chinese gamblers with the help of the Australian Consulate. If this wasn’t enough, another spate of allegations revealed money laundering in the bureaucracy.
With Corporate Australia being mired in controversies, it is a learning lesson for entrepreneurs looking for profit-making businesses for sale in Australia to tread the path cautiously. The investigations carried out by The Age, The Sydney Morning Herald and 60 Minutes have shaken the entire nation. The serious misdeeds reported include violating the Chinese anti-gambling laws and partnering with junket operators who are linked to money launderers, drug traffickers, human traffickers, etc.
In 2016, similar money laundering allegations came up against the Crown Resorts when a private jet with influential Chinese gamblers was searched by the Australian federal agents. Chinese President Xi Jinping’s cousin was found on the flight along with alleged fugitive Tom Zhou, who is also the business partner of Crown Resorts. The recent events have once again unleashed the connections of the Casino with Asian organised crime.
The Government has ordered a probe by the Australian Commission for Law Enforcement Integrity (ACLEI) to look into the matter which has taken everyone by surprise. Such scandals are not unknown in the commercial sector, but the association of the most prominent names in the industry makes it difficult to come to terms with the facts.
What Are The Politicians And The Government Saying?
The investigations were ordered after the Department of Home Affairs agreed that fast-tracking of visas was taking place. However, they maintained that the standard checks were being considered as usual. Some MPs are insisting on setting up a Parliamentary Committee to investigate the matter, but others fear that it will hurt the efficacy of the ACLEI probe.
The board members of Crown who have come under the scanner have hit back with an advertisement in some of leading dailies. There is a lot to learn from this controversy for young entrepreneurs as learning and adaptability are one of the best-kept secrets of successful entrepreneurs, and this is a classic example of what can go wrong with a successful organisation.
Who Are The Famous Crown Board Members?
The names that have come up include a long list of renowned industrialists. The largest shareholders of the Crown Resorts are James Packer and Lawrence Ho. The former is a billionaire businessman and the son of media mogul Kerry Packer. He was ranked as the tenth richest Australian by the Financial Review Rich List in 2018. However, he gave up his position in the board two years back but still holds a 26% stake in the company.
Lawrence Ho is a Hong Kong-based businessman hailing from Canada. He is Chairman and CEO of Melco International and was named Asia’s Best CEO in 2018 at the Asian Excellence Awards. Mr Ho bought a 19.9% stake in the company from Mr Packer in May 2019.
The other board members include the Executive Chairman of Crown, John Alexander who has been associated with the Packer family since the time of Kerry Packer who brought him onboard during their media dominance. When their interests shifted to gambling, Mr Alexander was positioned in the Crown Resorts. The next board member on the list is Helen Coonan who is serving as the non-executive director on the Crown Board.
She has earlier served as the Communications Minister for John Howard and was the most high profile woman in the Parliamentary Liberal Party. The other non-executive directors on the board who will be scrutinised include Andrew Demetriou, Geoffrey J Dixon, Harold C Mitchell and John Poynton. All of them have held important positions in the past and are quite well-known in the media.
While Mr Demetriou was the CEO of the Australian Football League during 2003-14, Mr Dixon was the CEO of Qantas from 2003 to 2008. Mr Mitchell is an advertising industry expert who also founded the largest media buying company in Australia and is recognised for his philanthropic activities. Mr Poynton has also been working as the director of the Future Fund.
How Have The Board Members Responded To The Scandal?
The Crown board has come out with an advertisement which presents their point of view on the ongoing scandalous news in the media. The ad claims that the story was based on unsupported allegations and falsehoods. In the description, they said that the company was working in a highly regulated environment and was complying with all the required regulations. Refuting the claims of money laundering, they stated that the Crown has its own anti-money laundering and counter-terrorism financing program which is monitored by AUSTRAC.
Additionally, they said that Crown was not involved in any offence in China. They also asserted that the company had not violated any visa requirement norms and had not intervened in the verification process for immigration. They further argued about the principles of the media organisations running the stories and drove home the point that Crown is a reputed and thriving entertainment/tourism operator which is a major contributor to the economy and has been doing a lot of charity.
The Road Ahead For The Board of Directors
According to experts, the Crown Resorts scandal does not pose much threat to the board members. They can claim innocence by stating that they did not know anything about it. The only downside of this investigation can be tarnished images of these esteemed and eminent personalities who have held powerful positions in the past or are still highly placed with various organisations in different capacities.
However, if the probe reveals misconduct on the part of the board of directors, then they will have to face prosecution by the Australian Securities and Investments Commission (ASIC). If they are found to have breached the Australian Corporations Act, then it is going to be a rocky road ahead.
The matter is under investigation and only time will tell how the corporate people will fare in this controversy. Meanwhile, it is an interesting case study for entrepreneurs who are planning to purchase businesses for sale in Australia as it sheds light on the violation of the Corporations Act.