James Packer has admitted to “shameful” and “disgraceful” behavior by sending threatening emails while negotiating a potential privatization of Crown Resorts with a US private equity firm in 2015.
But Crown’s largest shareholder has pinned his actions to the state of his mental health, telling an inquiry into the company’s suitability to hold a NSW casino license for its AU$2.2 billion Crown Sydney project that he suffered from bipolar which remained untreated at the time.
The inquiry will also determine whether Packer and other people deemed close associates of Crown Sydney are of “good repute” as required under the license.
Appearing in front of the inquiry via video link from his luxury yacht on Tuesday, it was revealed that Packer had sent the emails to a mysterious “Mr X” during negotiations with the firm, referred to by the Commission as simply “Z Co.” The pseudonyms “Mr X”, “Mr Y” and “Z Co” were used to protect the identities of two businessmen and the US private equity firm. Mr X was an executive at Z Co.
While exact details of those email exchanges were not made public during Tuesday’s hearings, Counsel assisting the inquiry Adam Bell revealed that Packer had been seeking an equity contribution of around AU$1.5 billion from “Z Co” towards the proposed privatisation.
Upon learning the firm could only offer AU$400 million, Packer confirmed to questions from Bell that he had made threats against “Mr X.”
Asked if he accepted that his conduct in the emails was both shameful and disgraceful, Packer responded both times, “I do.”
However, the billionaire businessman said the emails were a reflection of his mental state, stating, “I was sick at the time,” with bipolar.
In response to a question from Bell asking how the NSW regulator could have confidence in his character or integrity given the content of those emails, Packer responded, “Because I’m now being treated for my bipolar disease.”
In what proved to be an explosive day of testimony, Packer also admitted that Crown had suffered serious failures of compliance in relation to the arrests of 19 Crown Resorts staff for promoting gambling in mainland China in 2015.
The admission followed revelations by former Crown Resorts CEO Rowen Craigie last month that the company had operated an “unofficial” office in Guangzhou in order to disguise its presence from Chinese officials. The office, Mr Bell said, was leased in the names of China-based employees who were subsequently reimbursed.
When asked by Bell as to how this unofficial office came to exist during his time as Executive Chairman of Crown Resorts, Packer said, “It’s a failure in compliance, a significant failure.”
Intervening, Commissioner Patricia Bergin asked, “It’s more than that isn’t it, Mr Packer? I mean, Mr Bell has asked you about the ethical conduct of the public company. It goes to the core of it, doesn’t it, if you’re going to do that?”
“Madam Commissioner, I accept it’s a serious failure,” Packer replied.
Packer is due to give more evidence from 10am Wednesday.