Crown gave Packer secret profit forecast before $1.7b share sale
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Crown gave Packer secret profit forecast before $1.7b share sale

Crown Resorts boss Ken Barton has told a public inquiry he would have reconsidered sending confidential and price-sensitive company information to James Packer if he knew the billionaire was negotiating the sale of a $1.7 billion stake in the casino group at the time.

Giving evidence to the NSW Independent Liquor and Gaming Authority inquiry into Crown on Thursday, Mr Barton also made major admissions that the ASX-listed gambling giant could have done more to vet its business partners for links to organised crime and prevent money laundering at its casinos in Melbourne and Perth.

Crown CEO Ken Barton giving evidence to the ILGA inquiry on Thursday.

Crown CEO Ken Barton giving evidence to the ILGA inquiry on Thursday.

The inquiry heard that Crown's billionaire major shareholder Mr Packer emailed Mr Barton on May 3 last year to urgently request financial forecasts for the company through to 2022. Michael Johnston, a Crown director and executive at Mr Packer's private company Consolidated Press Holdings (CPH), followed up on this request on May 21 by encouraging Mr Barton to increase the profit projections in his draft report, the inquiry heard.

CPH announced on May 30 it had agreed to sell a 19.9 per cent stake in Crown to Hong Kong casino tycoon Lawrence Ho’s Melco Resorts in a $1.76 billion deal that would reduce Mr Packer's stake in Crown to 26 per cent.

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Mr Barton told the inquiry he did not know that deal was underway when he shared his profit forecasts, which he did as part of an arrangement intended to maintain a "strong relationship" with Mr Packer under a "controlling shareholder protocol".

Under that agreement, Crown officers could only share information with Mr Packer if it was in the interests of Crown and had to consider whether doing so could be inappropriate or benefit others.

Counsel assisting the inquiry Adam Bell asked Mr Barton whether he should have been informed that CPH was negotiating the share sale so he could decide whether sharing that information was appropriate. "I would have needed to do an analysis at the time of whether the controlling shareholder protocol would have still been available to us to share that information," Mr Barton said.

Mr Barton said he did not raise the issue with Mr Packer or Mr Johnston after he learned about the share sale deal, after it was signed.

Mr Barton, who was elevated to Crown's chief executive in January, on Wednesday assured Commissioner Patricia Bergin that Crown was making changes to its due diligence regime and anti-money laundering controls to ensure it will not repeat past failures if it is allowed to keep the licence for its new casino in Sydney.

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He said that the "relationship between revenue and compliance was out of balance" in some parts of Crown's business, including Crown's International VIP division, which had suffered a "lack of leadership" and put mechanisms in place that put "too much focus on profit".

However, Mr Barton insisted that ultimate responsibility for these failures lay with the division's bosses, not with Crown's directors.

The admission is in stark contrast to Crown's public statements last year that reporting by The Sydney Morning Herald, The Age and ABC's 60 Minutes about Crown's ties to criminal syndicates and abuse by money launderers – which triggered the public inquiry – were part of a "deceitful campaign" based on "unsubstantiated allegations, exaggerations... and outright falsehoods".

Mr Barton said Crown did not have access to the same facts that it has now when it made those claims in full-page advertisement and an ASX-release signed by its full board of directors.

Mr Barton said he had proposed an organisational restructure to the board that would abolish the positions of the two Crown executives who have given the bulk of evidence about its past failures to the inquiry: chief legal officer Joshua Preston, who is in charge of anti-money laundering compliance, and Australia resorts boss Barry Felstead, who is responsible for the high-roller business. The pair will leave the company unless new roles are found for them, Mr Barton said.

The inquiry will continue its public hearings with evidence from Mr Johnston on Friday. Mr Packer is scheduled to give evidence next week.

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