In Australia, a group of Crown Resorts Limited shareholders reportedly launched a class-action lawsuit against the casino operator on Monday in the wake of last year’s arrests in China of 18 of the Melbourne-based firm’s employees.
According to a report from the Reuters news service, the shareholders are suing Sydney-listed Crown Resorts Limited over its alleged failure to inform them of its controversial marketing activities in China as the 2016 arrests in Shanghai subsequently led to the firm’s value falling by more than $993 million owing to a 14% drop in its stock price.
The arrested Crown Resorts Limited workers had included a trio of Australian citizens and these were subsequently charged with promoting and organizing gambling activities in mainland China in violation of rules set out by President Xi Jinping in February of 2015. Local officials believed that the employees, who were all later released, had helped to entice Chinese nationals including high-value VIP individuals to illicitly gamble in Australia and Macau while possibly utilizing an illegal settlement network or other underground banking services to secretly transfer money out of the country.
Reuters reported that Sydney-headquartered law firm Maurice Blackburn Lawyers is leading the class-action lawsuit filed on behalf of the shareholders who had invested between February 6, 2015 and October 16, 2016. The plaintiffs are purportedly seeking compensation for last year’s stock price drop although Crown Resorts Limited purportedly declared that it intends to ‘vigorously defend’ itself against the allegations.
“Shareholders should have been apprised of the risks that Crown [Resorts Limited] was taking in China and the threat they posed to the company’s revenue streams,” Andrew Watson from Maurice Blackburn Lawyers reportedly told the news service.