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Australia's Crown says no charges laid against staff held in China
[PERTH] Australia's top casino operator Crown Resorts said on Thursday no charges had been laid against 18 of its staff held in China for alleged gambling crimes, adding to a sense of confusion that has surrounded the company's biggest crisis.
Ahead of an annual shareholder meeting at the company's casino in Perth, the Crown board endorsed plans to spin off some Australian hotels to minimise exposure to its underperforming businesses in the Chinese gaming hub of Macau.
But the arrest of the staff, three of whom are Australian nationals including head of international VIP gambling Jason O'Connor, in China last week was the main concern for investors as the company's shares hit a new 10-month low.
"While I know we all have many questions, we must be very cautious and measured in our commentary at this sensitive time in the process," Chairman Robert Rankin told the meeting, adding that "no formal charges" had been laid.
When a shareholder, Tshung Chang, complained about the lack of information, Mr Rankin said the situation was "difficult and complex".
Two of the three Australians detained in China had received consular visits and the third would be visited on Thursday, Mr Rankin said. A Malaysian national was also among the group, he said, but the company has not provided details on the nationalities of the other detainees.
The staff were being held for unspecified "gambling crimes" and investigations were ongoing, China's foreign ministry told Reuters on Monday.
It was too early to determine what impact the arrests would have on Crown's business, Mr Rankin said, amid fears it will hurt the company's ability to attract Chinese VIP gamblers to its Australian casinos, including a A$2 billion (S$2.14 billion) resort under construction on Sydney's harbourside.
Analysts have linked the detentions to Chinese laws banning casinos from advertising or promoting gambling in the Chinese mainland, such as offering credit to high-spending clients.
Melbourne-based Crown holds a 27 per cent stake in Macau-based Melco Crown Entertainment Ltd and relies heavily on Chinese gamblers at its casinos in Perth and Melbourne.
The detentions sent Crown shares tumbling 14 per cent on Monday and the sell-off continued on Thursday. Crown shares fell 2 per cent, while the broader S&P/ASX 200 index was flat.
In an unusual move, Crown issued a statement after the meeting saying "less than half" its international VIP annual revenue, or about 12 per cent of total revenue, came from Chinese high-rollers. In fiscal 2016, Crown reported group revenue of A$3.6 billion.
The plan to spin off some Australian hotels is designed to split the assets from Crown's underperforming businesses in Macau, which has seen VIP gambling revenue shrink amid a Chinese crackdown on corruption.
Crown said the spun-off unit would be listed as a new company on the Australian Securities Exchange and would include hotels in Melbourne and Perth. Meanwhile Crown would work on a broader demerger of its international businesses, it added.
It did not give a timetable for the listing or a price guide for the assets.
Fund manager George Clapham, managing partner of Arnhem Investment Management, said the break-up - first mooted in June - would release value for investors.
"Splitting out of the international business and the domestic casinos I think makes sense," said Mr Clapham, whose fund owns shares in Crown.