2020 has not been the best year for Crown Resorts. The global pandemic aside, the largest gambling and entertainment company in Australia, has faced numerous allegations including charges of money laundering. Every time one glances at the news there seem to be fresh revelations of misconduct by the beleaguered brand.
As if its woes weren’t enough, Crown Resorts has recently had a couple of new lawsuits levelled against it that could prove to be the final nail in the flagging company’s coffin.
Class-action
As its stock price plummets and its plans to open a new casino in Sydney have been waylaid, Crown Resorts also has to reckon with a class-action lawsuit. The legal action was launched by the Maurice Blackburn Lawyers law firm that argues that the questionable conduct of Crown executives is responsible for its stock price’s freefall.
The law firm had faced Crown in court before with a legal confrontation in 2017 when Crown’s stock took a severe hit after it was found to violate Chinese laws that prohibit marketing to locals.
Blackburn attorney Miranda Nagy said, “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. Instead, it appears Crown’s systems left the company potentially exposed to criminal activity happening on its premises and through its bank accounts.”
This lawsuit spans six years, allowing anyone who purchased stock from December 11th, 2014 to October 18th, 2020 to throw their hat in the ring. The suit demands compensation as well as the requirement that Crown buys back investor shares at an equitable price.
A fresh salvo
The second recent lawsuit that Crown has to deal with was brought to the fore by a former employee, Jenny Jiang.
In 2016, Ms. Jiang was employed as an administrative assistant at Crown’s Shanghai operation. She alleges that one of her primary responsibilities was to market Crown casinos to potential Chinese high rollers. This is an illegal practice in China and Ms. Jiang was soon arrested along with 18 of her colleagues.
In an interview, she relayed the impact the event has had on her life.
“Every year, the night we’ve been arrested, it feels like an anniversary for us,” Jenny said. “But it wasn’t a good memory because you remember that forever.”
Ms Jiang was accosted by police and detained due to her transgressions at the instruction of her employer. According to her, the criminal record that she now has in China has made finding employment an impossible task.
The wrath of the betrayed
Suffering through this incident inspired Ms Jiang to turn whistle-blower after the incident, alerting the press to Crown’s behaviour. She was subsequently fired, an action Crown chairperson Helen Coonan later described as “highly inappropriate.” The company also reportedly smeared her in the media when they referred to her as a “gold-digger.”
Jiang accused the company of slander, and after demanding an apology that never came, she filed a lawsuit to salvage her reputation.
In an interview with ABC News, Australia, she laid bare her accusations, “Crown operated in China without care to their staff. Their actions hurt me and my family. They have not been held accountable. I want justice.”
The lawsuit seeks to compensate her for her alleged ill-treatment and the emotional suffering caused by her arrest. According to Jiang, “We brought so much revenue, so much business and profit for Crown. And we were just dumped like a used napkin. That’s why I feel so angry. I feel so upset with what happened and what they’re saying about me.”
Crown seems to have erred once again in its judgment, as a simple apology may have helped the company avoid this latest legal headache. As things stand, this small oversight may lead to enormous consequences.
