© Reuters. FILE PHOTO: The logo of the top Australian casino operator Crown Resorts adorns a fence around the Crown Perth hotel and casino complex in Western Australia
By Byron Kaye and Nikhil Nainan
SYDNEY / BENGALURU (Reuters) – shareholders of Crown Resorts Ltd (AX 🙂 voted against executive compensation, a move to dismiss its board of directors, at the company's annual general meeting on Thursday as the Australian casino giant apologized for governance deficiencies.
The vote came as part of an ongoing government investigation into suspected misconduct at Crown that cast doubt on its suitability for operating casinos in New South Wales when game development amounted to A $ 2.2 billion ($ 1.6 billion) Billion USD) on Sydney's shores nearing completion.
Crown's directors and one-third of the owner, James Packer, admitted when questioned that they made misleading public statements about the company's involvement in Chinese junket operators that may be linked to organized crime.
They also revealed that they failed to respond to warnings that may have resulted in 16 employees being jailed in China in 2016 for violating that country's anti-gambling laws, a scandal that has affected Asian operations Crown failed.
The investigation also found that Packer, who resigned from the board of directors in 2018 for mental health reasons, continued to receive trade updates and orchestrated takeover proposals despite having no formal role other than the shareholder.
"I apologize unreservedly for these shortcomings," said Chairwoman Helen Coonan at the virtual meeting.
"The vote … reflects the dissatisfaction with the performance of the board of directors and the company, particularly with regard to evidence emerging from the (regulatory) investigation."
The owners of 34.3% of Crown shares voted against a resolution to adopt the compensation report. This was more than the 25% required to be considered a dissenting vote.
Under the Australian "two-strike" rule, if shareholders vote against a company's compensation report for two consecutive years, they can request a new resolution to remove the entire board of directors.
Three Crown directors standing for re-election received more than 50% of the vote they needed, but Vice Chairman John Horvath said he would step down after receiving a 58.4% vote. He told the meeting that it was appropriate to quit because he was relying on the re-election of Packer's vote.
A day earlier, Crown terminated an agreement revealed by the investigation to share confidential information with Packer. The company is also under investigation by the Australian Financial Criminal Police Department on suspicion of violating anti-money laundering protocols.
Crown shares fell slightly in the middle of the session on Thursday, in line with the broader Australian market (). The stock has fallen about 30% since February when concerns about the new coronavirus-related shutdowns sent global markets into turmoil.
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