Packer in ‘total shock’ after learning of Chinese staff fear
Billionaire James Packer says he was never told Crown Resorts staff were living in fear in China and that revelations aired in NSW's casino inquiry have been "a total shock".
The gaming mogul, 53, is being grilled for the second day today before the NSW Independent Liquor and Gaming Authority's inquiry into Crown, which will determine the fate of the new Barangaroo casino.
The probe is examining whether Crown remains suitable to hold a licence at the new high-roller development after allegations surfaced of money-laundering and junket partnerships linked to organised crime.
The inquiry was told Chinese authorities launched a crackdown on foreign casinos luring Chinese citizens to gamble overseas in 2015.
Nineteen Crown employees working in China were later arrested by local authorities in October 2016.
Senior counsel assisting Adam Bell SC produced an internal email between two Crown staffers in March 2015 - more than a year before the arrests - in which one wrote: "This is one thing that is important to understand when it comes to the China team: they are living in constant fear of getting tapped on the shoulder in a country where due process is inconsistently applied, it's a risky place to be for all our team".
Mr Packer agreed it was unacceptable for staff of an Australian company to feel unsafe but said he was not aware when he was director that they were scared.
Mr Bell said "this expression of being 'in constant fear' by the staff in China was obviously an important issue, do you agree, which you needed to be aware of whilst you were a director of Crown resorts?" to which Mr Packer replied "it should have been elevated to the board or at least the risk committee".
Mr Packer told the inquiry that the grave safety concerns held about Crown's staff in China were not passed onto him when they should have been.
He claimed he was kept in the dark by his subordinates even though he "always wanted bad news".
Commissioner Patricia Bergin questioned if this was because Crown executives had a desire to please him.
Mr Bell also produced an email between Mr Packer and a Crown executive about the VIP business of the company in China in 2018.
In the email, Mr Packer said he had asked a colleague to collate information about the business before writing "and that's before the couple of billions Crown lost by being forced to sell out of Macau because of our Australian VIP business behaviour China".
Mr Bell asked Mr Packer if he thought at the time that the arrests in China were the result of certain business behaviour by the VIP international business wing of Crown, to which Mr Packer said: "I didn't know why they occurred".
Mr Bell further prodded Mr Packer and asked what he was suggesting by saying he was forced to sell out of Macau because of Crown's VIP business behaviour in China.
"Mr Bell, I always presumed that something must have gone wrong in China for the arrests to occur, I never had the evidence, a lot of the things that I have seen or heard in this inquiry have been a total shock to me, that's my answer," Mr Packer replied.
Commissioner Bergin said "the evidence shows that there was a huge push in China to make very big sales during this period" and that "it was described and has been described as an aggressive push".
Mr Packer said the risk to staff would not have been worth it had he known the danger staff were in.
"The VIP business is not a huge part of profitability of the overall business," he said.
"To put ourselves at risk on so many fronts for 7 per cent of our profit … just makes no sense.
"We tried as an organisation to build a very good culture, we were named employer of the year by the Australian government three times between 2010 and 2014."
Oct 6: James Packer admits threats, says he's being treated for bipolar
Billionaire James Packer has admitted making "shameful" threats to a potential buyer of Crown Resorts and revealed he is being treated for bipolar disorder while giving bombshell evidence at a government inquiry.
The gaming mogul, 53, told the inquiry which will decide the fate of Crown's Barangaroo casino that he has taken medication which impaired his ability to remember events while he was director of the company.
Mr Packer appeared via video link from his luxury mega-yacht IJE in the Pacific Ocean on Tuesday for a grilling before the NSW Independent Liquor and Gaming Authority's inquiry into Crown.
The investigation is looking into whether the company remains suitable to hold a casino licence at its high-roller Barangaroo development amid allegations of money-laundering and junket partnerships linked to organised crime.
Senior counsel assisting Adam Bell, SC, told the inquiry Mr Packer had said in a statement he has suffered from "significant" health issues since 2016 and had been prescribed strong medication, which he remains taking.
"You say that you believe that this has impaired your ability to recall past events, including in relation to the period in which you were director of Crown Resorts, is that correct?" Mr Bell asked to which Packer replied: "That's correct".
Mr Packer was grilled over "shameful" and "disgraceful" emails he sent to someone only known as Mr X and admitted to making verbal threats to them while looking into a potential privatisation of Crown in 2015.
The inquiry was told Mr X was a representative of a mystery company Mr Packer was in discussions with about a proposed privatisation deal.
"You accept your conduct in these communications was shameful, do you?" Mr Bell asked.
Mr Packer replied "I do."
And he agreed when Mr Bell asked whether he accepted his emails were "disgraceful".
When asked how the NSW gaming regulator could have any confidence in his character in light of the emails, Mr Packer said "because I'm being treated now for my bipolar".
Mr Packer also told the inquiry that he agreed that he perceived in 2015 that increased investment in VIP international marketing in China was important for the success of the new VIP-only casino at Barangaroo, which was then in a planning stage.
However, he admitted that Crown having an unofficial office in Guangzhou - which he says he did not authorise - was "a significant failure" given it breached local Chinese law.
Commissioner Patricia Bergin said "it's more than that isn't it Mr Packer? … Mr Bell has asked you about the ethical conduct of the public company and it goes to the core of it, doesn't it?".
He replied "Madam Commissioner, I accept it's a serious failure".
Mr Packer, who resigned from Crown's board in 2018 but remains its largest shareholder, toured the construction site of the new Sydney casino - which is due to open in December - with his model girlfriend Kylie Lim and his mother Ros last January.
The intensely private Mr Packer, who has bought a $60 million private penthouse apartment in the new Barangaroo skyscraper, has largely kept out of the spotlight recently and lived overseas while dealing with mental health issues following the breakdown of his relationship with singer Mariah Carey in 2016.
The probe into Crown's Sydney development was also sparked by the unsuccessful sale of part of Mr Packer's stake in the company, which he attempted to sell to Macau-based casino group Melco Resorts.
Originally published as James Packer in 'total shock' after learning of Chinese staff fear