The former media executive who became chairman of Crown Resorts and one of James Packer’s right-hand men, John Alexander, has been grilled over his role in Crown’s controversial defence of allegations it was involved in money laundering.
The company in July 2019 ran a full-page advertisement arguing that reporting in the Sydney Morning Herald and the Age was part of a “deceitful campaign”.
Alexander had once been the editor-in-chief of the Herald and a champion of journalistic exposés. By 2019, however, he was a loyal Packer employee and both the chief executive and chair of Crown.
Crown’s strident defence in the advertisement, also issued to the ASX, has now come back to haunt it.
The statements in the advertisement are being picked over, line by line, in the NSW Independent Liquor and Gaming inquiry into whether Crown remains suitable to hold a Sydney casino licence.
The ad rejected allegations that Crown turned a blind eye to money laundering or partnered with junkets with links to organised crime.
Junkets are organisations that bring high rollers – mainly from China – to casinos. They often share in the takings from the gambler and in some cases operate the high-roller rooms within the casino. This was the case with Suncity, which operated in Crown Melbourne.
At the time that much of the alleged behaviour is said to have taken place, Alexander was both CEO and chairman of the board, from 2017 to January 2020. Prior to that, he was deputy chairman from 2007 – employed by Packer to focus on the casino business.
Alexander was asked on Friday whether he was aware that Austrac, the body responsible for monitoring cash transactions, had raised Crown’s relationship with the Suncity junket with Crown’s compliance officer, Joshua Preston.
He was also asked about when he learned that $5.6m had been found in cash in the Suncity high-roller room.
But Alexander, then the chief executive, said he did not recall being briefed on the matters, noting that Preston was not his direct report.
“Given that you didn’t know, are you in any position to answer the accusation that Crown turned a blind eye to money laundering?” the counsel assisting, Naomi Sharp SC, asked.
“It would make that proposition more difficult,” Alexander replied.
He was later shown an email from Preston which provided an update on Suncity and raised the $5.6m in cash that had been found in a cupboard. Alexander said he did not recall reading the email or its contents. But he agreed it should have gone to the risk-management committee for discussion.
Alexander was also asked to read on-screen a confidential report by Berkeley Research Group, commissioned by Crown, which detailed findings into Crown’s junket partners.
He read a summary on Alvin Chau, the man behind Suncity, the largest junket at Crown, who is alleged in the media to have been a member of the 14K triad, a Chinese crime gang.
What Berkeley said about Chau was not revealed. Alexander remained poker-faced.
“Could you say he’s a person of good repute based on this report?” Sharp asked. “No,” replied Alexander.
And would Crown do business with Suncity in the future?
“I hesitate to pre-empt the [new] guidelines that Crown is developing but it’s difficult to see how this person would meet them,” Alexander said.
Crown had claimed in the advertisement it had “robust processes” for vetting its junket partners and defended its relationship with Suncity. In the wake of the inquiry and Covid, which has closed the borders, Crown says it has suspended its business relationships with all junkets.
Alexander on Friday agreed that some of the claims in the mid-2019 advertisement were not accurate.
Asked who had vetted the assertions for accuracy, Alexander said it would have been Barry Felstead, the head of the VIP gaming business, and Preston.
“By asking Mr Felstead and Mr Preston, weren’t you effectively asking them to investigate themselves?” Sharp asked. Alexander disagreed.
Alexander also faced questioning over his knowledge of the Riverbank and Southbank accounts, which were operated by Crown to allow patrons to deposit cash for gaming, providing them anonymity.
An article in the Nine media in August last year claimed they were used to launder drug funds.
Alexander said he spoke to Preston on the day the article appeared but that no one made him aware that the Commonwealth Bank was, at the time, querying transactions in the accounts because of indications of possible money laundering and that ANZ bank had previously dropped the accounts because of its concerns.
Alexander insisted that Crown was on “a journey of improvement” and had hired more anti-money laundering staff, such as the former NSW deputy police commissioner Nick Kaldis.
But Patricia Bergin SC, the commissioner conducting the inquiry, remained “at a loss”, as she put it.
‘‘Your answer is that you didn’t know [about events that indicated possible money laundering]. If you don’t know, what chance has the regulator got?” she asked. Bergin reminded Alexander that she had to find both him and the company suitable to hold a casino licence.
Alexander has already announced he will step down from the board at the annual general meeting on 22 October.
James Packer is the next witness scheduled to appear, via video link on Tuesday.