Australia financial crime investigates casino giant Crown
Australia's financial crime agency began investigating casino giant Crown Resorts Ltd CWN.AX on suspicion of failure to comply with anti money-laundering protocols, putting a planned resort opening under pressure and sending its shares tumbling.
The Australian Transaction Reports and Analysis Centre (AUSTRAC)
said it began an “enforcement investigation” into Crown’s main casino in
Melbourne following a compliance assessment started a year earlier, without
commenting further.
AUSTRAC’s concerns were “focused on Crown Melbourne’s
management of customers identified as high risk and politically exposed
persons”, Crown said in a separate statement.
The investigation adds to an already sizable headache for
the company 37% owned by billionaire James Packer as it pushes ahead with a
plan to open a new casino in Sydney in December.
Another inquiry by a state regulator has been airing
allegations of “dysfunctional” senior management, poor risk control and issuing
false public statements.
The inquiry has already asked Crown’s directors why the
company is opening a casino during a review which will decide if it can keep
its licence.
It was triggered by media reports in mid-2019 which accused
Crown of doing business with casino tour, or “junket”, operators who had not
been vetted for organised crime links. Crown initially denied the allegations
in full-page newspaper advertisements but has acknowledged at the inquiry parts
of the denial were misleading.
Shares of Crown fell 10% by late morning, compared to a
higher overall market .AXJO, as investors weighed the impact of another
challenge for a company already facing a showdown at its annual general meeting
on Thursday.
“It will be volatile for a time. This has got uncertainty
written all over it,” said Mathan Somasundaram, CEO of investment researcher
Deep Data Analytics.
The last high profile company pursued by AUSTRAC, No. 2
lender Westpac Banking Corp WBC.AX, agreed to a A$1.3 billion fine last month
over unrelated compliance failures.
Crown was plunged into crisis in 2016 when 16 of its staff
were jailed in China for selling casino holidays, violating that country’s
gambling ban. Crown quit its overseas interests to focus on the Sydney resort
to grow profit.
In the years since, Packer has quit the board of the company
he started. At the regulator inquiry this month, he acknowledged demanding
frequent trading updates from management, despite having no official role,
while negotiating a series of takeover deals which never eventuated, all
unbeknownst to shareholders.
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