James Packer’s Crown Resorts has reportedly deployed a host of high-powered in-house and outside legal advisers and counsel to help assess the corporation’s vulnerability and liability following the arrest of 18 staff members for gambling crimes in China.
Eighteen employees, including three Australian nationals, were arrested in October for promoting gambling in China, where only a state lottery is permitted. All three Australian nationals along with the remaining 14 in custody, were formally charged last week in a move seen to be a signal of the Chinese government’s determination to pursue what they see as illegal activities. The government had earlier warned Crown not to market their overseas properties to ‘whales’ or high-rolling VIPs in China, according to an October report in the Sydney Morning Herald.
According to Fairfax Media (The Age) at least one goal of the legal counsel and advisors is to determine Crown’s culpability in the staff’s actions. News of the arrests sent stock prices tumbling concerning shareholders. Families of the arrested and charged individuals may also feel that the company put their loved ones in harm’s way by allowing or directing them to break Chinese law in pursuit of profits.
Other sources seem to indicate there may be ‘paper trails’ proving that Crown was warned by the government not to market there. Over a year ago the Chinese Ministry of Public Security warned all operators and promoters publically not to set up offices in China for the purpose of attracting “Chinese citizens to go abroad and gamble.”
Crown head of international VIP operations Jason O’Connor, Beijing-based director of international VIP marketing Jerry Xuan, and Pan Dan may face long odds in coming home soon. The judiciary in China is state-controlled and has a conviction rate of just under 100 percent once official charges have been made, as they were last week against the three Australians and 14 Chinese nationals.
According to Fairfax Media, the high-powered law firm of Minter Ellison has been tasked with conducting an internal review to help gauge the company’s legal exposure. Corporate governance and a risk management assessment is being conducted by Crown general counsel Michael Neilsen. Executive general manager of legal and regulatory services, Debra Tegoni, is heading up a review of day-to-day operations, according to the report.