Forcing James Packer to slash his stake in Crown Resorts is “wholly inappropriate” punishment, his lawyer argues, lashing Victorian commissioner Ray Finkelstein as having made the recommendation on a “fundamentally flawed” basis.
Last year’s Victorian royal commission recommended cutting the reclusive billionaire’s stake in Crown from 37 per cent to less than 5 per cent, which the state government accepted along with all other recommendations.
The NSW government also backed all suggestions stemming from its explosive 2020 inquiry, including prohibiting a person from holding an interest of 10 per cent or more in a casino licensee without the prior approval of a new, powerful Independent Casino Commission.
Both recommendations came after Mr Packer’s influence on Crown was labelled “disastrous” by the NSW investigation, as he was the driving force to secure more of the Chinese high-roller junket tours at the centre of the gaming giant’s money laundering scandal.
And giving evidence to the Perth royal commission in October, Mr Packer said “I don’t object” when asked about the 5 per cent shareholding cap.
But in closing submissions to the probe on Wednesday, his barrister Noel Hutley spent the vast majority of his near-one hour before the commission arguing against it.
Commissioner Lindy Jenkins asked if that meant Mr Packer would fight the recommendation, suggesting the issue was “done and dusted”.
“Your position seems to be that that recommendation is not agreed with: The CPH parties, are they challenging it?” she asked.
“Are they making representations to the Victorian government to the effect that it should not be implemented?”
Mr Hutley replied: “As to the former, legal challenge obviously to a recommendation of a royal commission … is practically impossible.
“As to in effect what is being done politically, it is really not appropriate, in my respectful submission, that I give such sort of materials from, as it were, what used to be called the bar table.
“And in our respectful submission, this commission’s views on these topics will be important.
“If the recommendation was predicated on a incorrect premise, whether my client is prepared to go along with it or not – which in one sense, if it’s a legislative outcome they have no choice with so it doesn’t really matter – is in our respectful submission not to the point.
“The point is whether you recommend that it shouldn’t occur.”
Meanwhile, US private equity giant Blackstone is yet to provide a binding proposal for Crown, having last month finally secured the board’s support for its improved $13.10 per share indicative takeover offer.
If it does, Mr Packer and other shareholders have an easy way to dispose of their shares, which were on Wednesday priced at $12.27 in intraday trade – making his 37 per cent stake worth more than $3bn.
Also, Commissioner Neville Owen queried why Mr Hutley characterised Mr Packer not attending a single board meeting of Crown Perth’s Burswood Ltd between 2013 to 2016 after he moved overseas – the final three years of his chairmanship – as not being causative of any problem.
“You weren’t keeping an eye on things, Mr Packer,” counsel assisting Patricia Cahill said during his testimony in October, an assertion he rejected.
“I should have resigned or attended, I accept that,” he added.
Commissioner Owen put to Mr Hutley on Wednesday that “leadership is vital in a commercial operation” and could be an explanation for some of Crown’s woes.
The barrister said Mr Packer’s absence had been “a departure from good practice”.
“It was a matter of regret that Mr Packer did not stand down as chair if he was not attending because there should have been a chair but there was at all times an acting chair … so one has to treat that, with respect, as a mitigating factor,” Mr Hutley said.
