It is more than two years since one of Australia’s richest men, James Packer, disappeared from the public eye saying he needed to take care of his mental health.
When resigning in 2018 for the second time from the board of Crown Resorts, the casino company he founded, a brief announcement to the Australian stock exchange confirmed what his close friends already knew and many suspected: Packer was taking time out for “personal reasons”.
More details were revealed subsequently in an empathetic biography by the journalist Damon Kitney, who was given access to Packer and his inner circle. Kitney detailed Packer’s struggles with depression, alcohol and the end of his marriage to Erica.
Since then, Packer has lived overseas in Los Angeles, Mexico and Argentina and largely disappeared from the glare of public scrutiny that had intensified during his brief and disastrous engagement to singer Mariah Carey.
He did not attend the 2018 and 2019 annual general meetings of Crown, despite being its largest shareholder.
That’s reason enough for the intense interest in his scheduled appearance – via video link – on Tuesday at the NSW inquiry into whether Crown Resorts remains suitable to hold a casino licence.
Whether it’s prurient interest or genuine concern, the story of one of Australia’s richest sons and his battles with his demons strikes a chord with the public.
But there are also plenty of questions that only Packer can answer about his casino business, its culture and how it came to be the subject of serious allegations of money laundering and links to organised crime.
At stake is the future of the high-roller casino that will occupy several floors of Crown tower, which has risen 275m at Barangaroo on the shore of Sydney harbour.
Under NSW law, a casino licensee in the state and those deemed associates must remain suitable to hold their licence. But other states where Crown operates are also watching.
Crown could lose everything if allegations made by Nine media outlets – of Crown executives turning a blind eye to money laundering and the criminal connections of its junket partners – are upheld. If deemed serious enough, Crown’s licence could be revoked.
So far executives have told the inquiry that Crown ran accounts that allowed cash to be deposited anonymously and which were not subject to the reporting regime. They also admitted that $5.6m in cash was found in a cupboard in a high-roller room, run by junket partner Suncity, in Melbourne. There have been allegations about Suncity’s connections to organised crime.
The commissioner overseeing the inquiry, former supreme court judge Patricia Bergin SC, needs to be convinced that Crown has the systems, the executives, the culture and the will to tackle these issues in the future. In short, that it remains suitable to hold a Sydney licence.
As the largest shareholder, Packer is one of those associates that must also be suitable. It all adds up for an uncomfortable few hours for Packer.
Unlike those who work for him, who appeared via video link from their offices, Packer will be beamed in on Tuesday from his super yacht.
The $200m sleek white luxury cruiser designed by Bennetti and measuring 108m, with accommodation for 22, was last logged on the website Marine Traffic near Papeete in Tahiti. Packer is due to appear in the afternoon via satellite and, hopefully, communications will prove as state of the art as the yacht itself.
As the largest shareholder in the listed Crown, currently holding 36%, Packer alone could give many of the answers as to just what happened to the proposed sale of 19.9% to Melco Resorts, the company of Macau-based casino mogul Lawrence Ho.
The sale has fallen apart due to the impact of Covid-19 on casinos around the world and Ho has offloaded the 10% he had purchased in the first tranche of the deal to Blackstone, a private investment company.
But there remains the question of how Crown, a listed company, failed to tell the regulator of the proposed sale ahead of time and have the new significant shareholder vetted. So far, the evidence heard by the inquiry points to Packer having personally negotiated the deal.
There is an added complication: a specific clause in the Sydney casino deed with the NSW government prevented Lawrence’s father, Stanley Ho, a notorious figure in Macau, and a long list of companies associated with him, from taking an interest in the licence.
The reason? The NSW government was determined that organised crime should not get a foothold in the Sydney casino, and Stanley Ho had been found by other overseas casino authorities to have links to criminal elements in Macau.
Crown executives have so far given evidence that they thought Melco was Lawrence’s company. But in fact, the largest shareholder in Melco International is Great Respect, which runs a family trust. Stanley Ho, who died recently, was one of the beneficiaries.
The regulator is concerned about Crown’s culture.
The evidence heard by the inquiry so far paints a picture of a company that is unable to evaluate itself, does not have good reporting structures, is defensive when criticised and does not have rigorous risk management.
Board members have repeatedly denied knowledge of behaviour that might have raised red flags to the possibility of money laundering.
They appear to have failed to explain why warnings about the crackdown in China on soliciting Chinese gamblers wasn’t brought to their attention, leading to the arrest and jailing of Crown’s China staff en masse in 2016.
Time and again Bergin has asked: “If the company doesn’t know what’s happening internally how on earth is a regulator supposed to know?”
Tuesday is Packer’s turn to be quizzed. He may not be on the board, but as the founder and largest shareholder, with representatives of his private company on the board, he will face intense scrutiny about Crown’s corporate culture.
He will be asked about how it came to this: that Australia’s largest casino operator is being accused of being a laundry for drug dealers and organised crime and could face losing its licence before its Sydney casino has even opened.