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Crown faces share buybacks over alleged money laundering
Crown Resorts might be forced to buy back shares from investors after a class action against the casino’s governance and risk management failings caused a massive share price plunge in October.
Crown faces share buybacks over alleged money laundering
Crown Resorts might be forced to buy back shares from investors after a class action against the casino’s governance and risk management failings caused a massive share price plunge in October.
Crown’s share price fell over 8 per cent on 19 October after news emerged that anti-money laundering agency AUSTRAC had initiated a formal enforcement investigation into Crown, having identified potential non-compliance by Crown Melbourne with anti-money laundering (AML) financing laws.
Maurice Blackburn, in a case lodged with the Supreme Court of Victoria, alleges that Crown had engaged in misleading or deceptive conduct during the period from 11 December 2014 to 19 October 2020, by representing that it had "robust or effective systems" for ensuring compliance with its AML obligations, including as they applied to its VIP international business and engagement with overseas junket tour operators, and had not disclosed relevant information to the market.
The claim also alleges that Crown conducted its affairs during that period in a manner that was contrary to the interests of shareholders and is seeking an order from the court that the company buy back shares from affected investors.
At Crown’s AGM on 22 October, following weeks of damaging evidence at the NSW Casino Inquiry, chairwoman Helen Coonan “unreservedly apologised” for Crown’s “governance and risk management failings”.
On 19 November, Crown conceded to the NSW Casino Inquiry that it was “more probable than not” that criminals had laundered money through two of its bank accounts.
Maurice Blackburn principal class actions lawyer Miranda Nagy said shareholders would expect Crown to have best-practice governance and to have complied with laws designed to combat money laundering.
“We believe these governance failures have caused real loss to shareholders who would have expected best-practice compliance with anti-money laundering obligations, especially given Crown’s repeated public statements that it took compliance with such laws seriously,” she said.
Ms Nagy pointed out that Crown’s system left the company potentially exposed to criminal activity happening on its premises and going through to its bank account.
“An object of the anti-money laundering laws is to promote public confidence in the Australian financial system by the detection and disruption of money laundering,” she continued.
“Investors are entitled to rely on gaming companies to implement systems that will ensure rigorous compliance with all such laws, because casinos are unmistakable targets for criminal activity.”
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