Crown Resorts Gets Hit With Class Action Suit

After returning to the Crown Resorts board, Australian billionaire James Packer and board were smacked with a class action lawsuit from investors.

According to the Sydney Morning Herald, Crown Resorts shareholders have prepared to file a class action suit against the operator in connection with staff arrests in China last November. Investors reduced stock holdings are flat out excited following the news.

The suit will be spearheaded by the firm Maurice Blackburn and funded by International Litigation Funding Partners. Class action principal Julian Schimmel argues that Crown Resorts had an obligation to inform its investors of the risks the company faced in its Chinese ventures. Doubly so following the revelation of arrests linked to casino marketing junkets.

The number of arrests numbered 18 in all from Crown staffers last October and included three Australian nationals. One staffer has been released with those remaining awaiting trial on unspecified charges. Prior to authorities’ apprehension of Crown staff, numerous employees from South Korean junkets had been taken into custody during June 2015.

Schimmel attests,

“The arrests in China occurred against the backdrop of Crown’s massive investment in its Sydney venture at Barangaroo, which has been spruiked as opening as a ‘VIP only’ casino and luxury resort in 2021,” adding, “Despite repeatedly making statements over a period of several years as to the significance of the Chinese VIP gaming market to the company’s strategy and earnings, Crown then tried to downplay the significance of the staff arrests claiming that the Chinese VIP market only comprises a small proportion of the company’s revenue.”

While the amount the suit claims in damages remains unclear, it has been suggested the amount will be “in line with some of Australia’s largest shareholder class actions, which have generally been in excess of $100 million.”