James Packer Grilled About Imprisonment of Crown Resorts Staff in China, Won’t Accept Full Blame

Billionaire James Packer said Wednesday he was not aware that Crown staff were living in fear in China prior to their arrest and subsequent imprisonment for “gambling crimes” in 2016.

Packer was giving evidence for the second day at a licensing suitability inquiry in Sydney via video link from his superyacht somewhere in the Pacific. He was being quizzed about why the company ignored warnings about China, specifically those of Michael Chen, Crown’s then-president of international marketing.

Chen told the board in March 2015 that the China team was “in constant fear of getting tapped on the shoulder,” and that China was “a risky place to be for all our team.”

Ethical Failures?

The imprisonment of 19 Crown Resorts staff for marketing the company’s services in China, where gambling is illegal, was a national scandal in Australia, and severely embarrassed Crown.

The operator was forced to completely reevaluate its marketing strategy in the region and rein in its international expansion plans to reduce exposure to the Chinese market.

Packer was asked if “ethical failures” were responsible for the disastrous VIP program, which was instituted when he was executive chairman of the company. He resigned as chairman in 2015, only to rejoin in 2017 and resign again in 2018, citing mental health problems. He remains the majority shareholder in Crown Resorts.

“I accept some, but not all [blame],” Packer replied.

Didn’t Consider Stanley Ho Ban

It was then put to Packer that he held more influence over the Crown board than was proper after he exited the company.

The billionaire admitted that he often sent instructions to the board via emails, which were always acted upon, and that he was party to privileged information, despite no longer holding a role within the company.

This matters because the Crown board was unaware of the sale of Packer’s 19.9 percent of Crown to Lawrence Ho’s Melco Resorts until it had been agreed between the two parties. The inquiry is concerned about conflict of interest and even insider trading in respect to the share sale.

Packer replied that he didn’t give it “any thought at all,” adding that he had “forgotten” about the clauses blackballing Stanley Ho, who had been extremely frail for many years.

“I regarded Melco as Lawrence’s company rather than Stanley’s,” he added.

Packer will continue his testimony tomorrow, when he is expected to be grilled about the junket operations and possible money laundering at Crown properties.