Two Crown Resorts directors resign after critical regulator report

FILE PHOTO: FILE PHOTO: The logo of Australian casino giant Crown Resorts Ltd adorns the hotel and casino complex in Melbourne, Australia

By Nikhil Nainan and Shriya Ramakrishnan

(Reuters) – Australia’s Crown Resorts Ltd said on Wednesday two directors nominated by top shareholder James Packer have resigned, a day after a critical report by an industry regulator deemed the casino giant unsuitable to hold a gambling licence.

The report published on Tuesday found Crown is unfit to hold a gaming licence for its flagship new Sydney resort unless it makes sweeping changes to its board and culture.

Guy Jalland and Michael Johnston, both nominees of Packer’s holding company, had resigned, Crown said in a one line statement.

Crown shares plunged as much 8.9%, compared with a slightly higher broader market.

The report followed a year-long inquiry by the New South Wales state gambling watchdog that aired allegations of widespread money laundering and governance failures at Crown.

“They’ve got a lot of work to do to satisfy us,” Philip Crawford, chair of the NSW Independent Liquor and Gaming Authority, told reporters on Wednesday. “We’ll have a dialogue with Crown to see what they can do. I hope that they cooperate.”

The report, headed by retired judge Patricia Bergin, recommended a 10% limit on any casino shareholdings in the state without specific approval, a move that would effectively force Packer to divest some of his 35% holding in Crown.

Bergin also singled out Chief Executive Ken Barton as “no match for what is needed.”

(Reporting by Nikhil Kurian Nainan and Shriya Ramakrishnan in Bengaluru; editing by Jane Wardell)