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The suitability of Crown’s casino licence at Sydney’s Barangaroo is under investigation by the NSW Independent Gaming and Liquor Authority. Photograph: Jason Reed/Reuters
The suitability of Crown’s casino licence at Sydney’s Barangaroo is under investigation by the NSW Independent Gaming and Liquor Authority. Photograph: Jason Reed/Reuters

James Packer deputy faces questions over possible licence breach in Crown sale

This article is more than 3 years old

Guy Jalland denies he knew of late Macau mogul Stanley Ho’s interest in Crown share buyer Melco

One of billionaire James Packer’s key lieutenants, Guy Jalland, has faced a grilling over whose interests he believed he was representing at a key meeting on 23 May last year where the $1.7bn sale of part of Crown to Melco Resorts was finalised.

Jalland is a director of Packer’s private company, Consolidated Press Holdings and the ASX-listed Crown Resorts. But he was not a director of the CPH company that held the shares in Crown and that was selling nearly 20% of its 46% holding.

The inquiry by the New South Wales Independent Gaming and Liquor Authority is investigating whether Crown remains suitable to hold the high roller casino licence at Barangaroo. The casino is due to open in December.

One of the key questions is whether Crown breached a term of its licence when CPH sold 10% of the shares in Crown to Lawrence Ho’s Melco Resorts. The second part of the sale did not proceed and Melco has now exited Crown entirely, citing the economic pressures of Covid-19.

The Sydney licence contains a specific provision that prevented Lawrence’s late father, Stanley Ho, and a list of companies from being associates of the Sydney casino.

Concerns about Stanley Ho were first raised by the NSW government in 2013 when Crown bought a share of Echo Entertainment, which ran the rival Star casino.

Stanley Ho, a major figure in the Macau gaming scene, had been cited in other gaming regulators’ reports as having links to organised crime.

At the time of the Echo deal, Crown was in business with Melco International in Macau in a joint venture to build the City of Dreams casino and resort. The issue was raised again when Crown was awarded the Sydney licence and included in a deed.

Despite being involved in negotiating the joint venture in 2006, Jalland said he was not aware that Stanley Ho had interests in Melco International via a trust run by a named banned company, Great Respect.

“It was my belief for a considerable period of time that Stanley Ho had no interest in Melco Resorts or Melco International,” he said.

He said he did not recall knowing that Great Respect was listed as a major shareholder in Melco International’s publicly available annual report.

He said that Melco had been subject to multiple probity checks by NSW, Queensland, Victorian and Nevada gaming authorities, and he believed it was Lawrence Ho’s company.

Although aware of the NSW government’s concerns about the influence of Stanley Ho on the Barangaroo casino licence, Jalland said he did not check Melco’s ownership structure when it came to negotiating the deal to sell up to 19.9% of Crown to Melco last year.

“I didn’t check,” he said.

Jalland also faced questions over whether, as a director of Crown, he should have informed the other Crown directors about CPH’s plans to sell a share to Melco.

“I don’t believe I had an obligation to notify Crown,” he said.

The commissioner, Patricia Bergin SC, a retired supreme court judge, asked Jalland whether he had appreciated that as a director of Crown, he shouldn’t do anything to harm Crown.

Jalland replied that he did not think Crown had been exposed to a risk from the Melco sale.

She also asked why he hadn’t told the Crown board about the sale.

“I would never expose CPH’s confidential information to a third party,” he said.

Jalland disagreed with Bergin’s suggestion that he could be “perceived to be in a position of conflict of interest”.

The hearing continues, with Jalland to give more evidence. Packer is expected to give evidence by video link later this week or next week.

The NSW inquiry is likely to have implications for Crown’s Melbourne and Perth casino licences. The inquiry is also looking into allegations aired by Nine Entertainment last year of Crown turning a blind eye to money laundering and the involvement of organised crime in junkets that brought high rollers to these two venues.

Shortly after the allegations were made, Crown published a full-page advertisement refuting Nine’s claims. Some directors have since acknowledged to the inquiry that the advertisement was not entirely accurate.

The Victorian Commission for Gambling and Liquor Regulation, which is responsible for overseeing the Melbourne casino, does not plan to investigate the evidence that has emerged from the hearings in NSW until after the inquiry is over at the earliest.

“The VCGLR continues to monitor investigations and inquiries currently underway by other regulators into Crown and will take appropriate action should new information or evidence come to light,” a spokeswoman said.

“In particular, VCGLR has been closely working with and assisting the NSW casino inquiry and will continue to do so as that inquiry continues its work.”

The commission has not increased the size of its casino monitoring team since it was heavily criticised as a “do nothing” regulator following the Nine Entertainment allegations.

In August last year, the commission’s chief executive, Catherine Myers, told ABC radio there were two people in the team, which works at the casino, at any one time. That number remains unchanged, the commission’s spokeswoman said.

It is also unclear what has happened to an “urgent” review of Crown’s suitability to hold the licence, ordered by the then minister for consumer affairs Marlene Kairouz in August last year.

Kairouz stepped down in June over her links to alleged branch stacker Adem Somyurek.

A spokeswoman for her replacement, Melissa Horne, did not respond to Guardian Australia’s questions about the fate of the review on Tuesday.

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