The CEO of the Australian casino operator, Crown Resorts, Ken Barton, resigned on 15 February in the wake of the findings of an inquiry that judged the operator to be unfit to hold a gambling licence for its new Sydney casino.
The inquiry uncovered evidence of pervasive money laundering and governance transgressions. It precipitated Barton’s resignation, which was expected as his presence was a sore point for the state regulator that suspended the company’s gambling license. Crown was on the verge of opening its massive casino resort in Sydney, and this latest development brings all of its plans into question.
Barton’s departure was not the only one as three directors of the company have also vacated their posts following the inquiry’s report.
The vacant CEO’s position has created a vacuum that will need to be filled soon by the company that is 36% owned by billionaire James Packer. The company’s chairperson, Helen Coonan, a former federal communications minister, will expand her role to absorb executive responsibilities until a new CEO is appointed.
In a statement, Coonan said, “Assuming the role of executive chairman is a decision I have not taken lightly, but the Board feels it provides leadership stability and certainty at this important time for the business. The Board is determined to maintain the momentum as Crown takes significant steps to improve our governance, compliance, and culture.”
The recently released report caps a year-long inquiry that was initiated by the New South Wales state gambling watchdog. Its contents revealed allegations of widespread money laundering and failures in governance at Crown. The report ultimately recommended comprehensive changes to the company’s Board and culture.
The report states that Crown is, therefore, not eligible for a gambling license. Barton was described as “no match for what is needed at the helm of a casino licensee”. Before the resignation of the CEO and the directors mentioned in the report, the Victoria state had formally requested that Barton justify continuing in the role.
Like Coonan, Barton had only assumed his role a year ago; however, he had served as Crown’s chief financial officer for a decade prior.
Crown shares saw a rise of 0.9% on the day of the announcement in line with the broader market. However, the stock is still down one-sixth since a year ago following lockdowns and border closures geared ad combating the spread of the coronavirus which spooked investors interested in the company’s earnings potential.
The company’s half-year results are expected to be made public on Thursday.