Australia's Crown Resorts CEO resigns after inquiry report

The chief executive of embattled Crown Resorts resigned on Monday, bowing to growing pressure after an inquiry found widespread money laundering and governance issues at the Australian casino operator.

The move, which was widely expected, removes a point of contention for a state regulator that suspended the company’s gambling license just before it opened a giant casino resort in Sydney but deepens the uncertainty over its future direction.

Since an inquiry found last week that Crown was unfit to hold a Sydney gambling license due to systemic governance problems, three directors of the company have stood aside.

The exit of CEO Ken Barton leaves an even more pressing vacancy in the company, which is 36% owned by billionaire James Packer.

The company said chair Helen Coonan, a former federal communications minister who has been in the job for a year, would expand her role to include executive responsibilities while it searched for a new CEO.

“Assuming the role of executive chairman is a decision I have not taken lightly but the Board feels it provides leadership stability and certainty at this important time for the business,” Coonan said in the statement.

“The Board is determined to maintain the momentum as Crown takes significant steps to improve our governance, compliance and culture,” she said.

In last week’s report, a year-long inquiry commissioned by the New South Wales state gambling watchdog laid bare allegations of widespread money laundering and governance failures at Crown and called for sweeping changes to its board and culture.

The report said the company was unsuitable for a gambling license and singled out Barton as “no match for what is needed at the helm of a casino licensee”. As other directors criticized in the report quit in the following days, the regulator of Victoria state said it had also formally requested Barton justify staying in the role.

Barton, like Coonan, only started in his role a year ago but was Crown’s chief financial officer for a decade before that.

Crown shares rose 0.9% on Monday, in line with the broader market, but the stock is down one-sixth since a year ago as lockdowns and border closures to contain the coronavirus keep investors wary about its earnings prospects.

The company is expected to announce its half-year results on Thursday.