Crown Resorts director Guy Jalland has maintained to the NSW inquiry into the casino giant that junket operator Suncity was an acceptable partner in the face of reports linking its owner – Alvin Chau – to organised crime.
Separate due diligence dossiers on Mr Chau raised questions about his past.
“Mr Chau appears to have been a former member of 14K triads Macau branch and was reportedly in charge of loan sharking and gambling,” an excerpt of a Wealth-X report read to the inquiry on Wednesday said.
“A little further down Chau started his own gang,” the report continued.
But Mr Jalland, who agreed a confidential due diligence report was a comprehensive investigation, said he remained of the view that Mr Chau was an acceptable junket operator.
“It is a very difficult balancing act,” he said. “There are issues that need to be addressed … in terms of assessing on this report, I didn’t see anything that made me say that we should cease doing business with them.”
The NSW Independent Liquor and Gaming Authority (ILGA) probe is examining the suitability of Crown to hold a restricted gaming licence for its near-complete Barangaroo casino on Sydney’s waterfront.
And, under the state’s Casino Control Act, ILGA is to consider whether the company’s close associates are of good repute, having regard to their character, honesty and integrity.
Can you have any comfort at all that Mr Chau is a man of good repute after reviewing this report?
— Counsel assisting the inquiry Naomi Sharp, SC
Commissioner Patricia Bergin, SC, will deliver her findings and recommendations, which could mean further restrictions are placed on the licence or it be removed entirely to the authority, by February 1.
ILGA set up the inquiry following a decision from Crown’s most significant shareholder – James Packer – to sell a fifth of the company to Macau-based casino operator Melco Resorts.
However, the inquiry has refocused on Crown’s partnerships with junket operators with alleged organised crime links after the second stage of the sale was scuppered and Melco sold its remaining interest in the ASX-listed company.
The Sydney Morning Herald, The Age and 60 minutes reported Crown breached anti-money-laundering laws and partnered with junket operators linked to drug and human trafficking last year.
In regards to Suncity and Mr Chau, the inquiry has already heard that the outfit had ignored Crown’s requests for information and, in May 2018, were discovered to have hoarded $5.6 million of cash in a cupboard in Crown Melbourne.
The latter had sent the casino’s chief legal officer’s “money-laundering alarms ringing”, the inquiry heard in August.
Crown had also wrongly claimed, in a full-page newspaper ad response to the media reports, that Suncity was controlled by a Hong Kong Stock Exchange-listed entity.
Mr Jalland said he was trying to be circumspect when asked whether his opinion was expressed with appropriate weight on the responsibility of Crown to have business relations with only those of good repute.
“Can you have any comfort at all that Mr Chau is a man of good repute after reviewing this report I have just taken you to?” counsel assisting the inquiry Naomi Sharp, SC, asked.
“Ms Sharp, my difficulties as I explained a minute ago, is a lot of this is allegation,” Mr Jalland responded.
He referenced Crown’s suspension of all junket partnerships until June next year, when he said the casino would determine where it drew the line on what would disqualify a potential partner.
Still, Commissioner Bergin said it must be up to the junket operator to prove it is of good repute, not Crown, and said the due diligence reports would not be a good indication of this.
When Mr Jalland began his response, Commissioner Bergin shot back: “You could ask him [Mr Chau]. You could say to him, ‘I have information about allegations that you have done this, this and this, and I’d like you to tell me about these?’ Surely you could put that to a proposed junket operator.
“In this country, you have got to put allegations to people.”