Crown Melbourne CEO Knew About Underpayment for Years
The more that the Victorian Royal Commission digs into Crown Resorts, the worse it gets for the casino giant. On Monday, Crown Melbourne’s CEO admitted to the Royal Commission that he knew about pokies tax underpayments for years. However, he didn’t bother to examine the matter until after the inquiry from the Royal Commission began.
Crown Melbourne CEO Makes Stunning Admission
On Monday, Crown Melbourne CEO Xavier Walsh gave testimony to the Victorian Royal Commission. He told the body that he found out about the company’s underpayment of taxes back in 2018. This means that for three years, Walsh allowed the Crown to continue underpaying taxes. He didn’t bother to try and take action about the matter until February 24th of this year. That’s two days after the initial announcement of the launching of the Royal Commission inquiry.
Crown Melbourne chief executive Xavier Walsh knew about the gaming giant's potential tax underpayment in 2018 but only started investigating it the day after Victoria's royal commission was announced, it has been revealed.
— no way (@no_fkng_way) July 6, 2021
To say that the Commission didn’t like this revelation is an understatement. Commissioner Raymond Finkelstein QC lit into Walsh over his testimony. He told Walsh that he was trying to “come to grips with why you did nothing since 2018.” He continued, saying, “This deception was known to many people in the organisation and it didn’t seem to trouble anyone.”
Finkelstein later took offense to Walsh’s claim that the tax problem was a historical one. According to Finkelstein, “There is nothing historical about it all – I don’t understand why you keep putting it as a thing of the past. You’re still calculating tax on the same basis … this is not five years old or 10 years old, it is current.”
Discover Of Tax Underpayments Was Mistakenly Revealed
Mr. Walsh has been claiming that the company has been stringently pushing a change to corporate culture since late 2020. He appointed Helen Coonan, chair of Crown Resorts, with spearheading the initiative.
However, Adrian Finanzio SC and his counsel paint a very different picture. Counsel states that it was the Royal Commission announcement that sparked the “corporate change” rather than any initiative by the company.
Absolutely damning evidence on @abc730 of high level corruption, money laundering @crownmelbourne Brave & fed up gaming inspectors and @WilkieMP calling out “protection racket” linking govt, Packers and Crown Casinos https://t.co/ifbhN2FuYw
— 💧Dr Adele Millard BA(Hons) MBA (@trufflehuffer) July 5, 2021
When outright asked whether the company cheated on taxes, Mr. Walsh replied, “I think there’s potential that we have.”
Mr. Finanzio later pointed out that the Commission only discovered the underpayment because Crown GM of Gaming Machines Mark Mackay, accidentally included a spreadsheet in the evidence presented to the Commission. Mackay later gave testimony regarding the underpayment.
Incredibly, Walsh states that the Crown was planning to wait until after the Royal Commission to reveal the tax underpayments. According to Mr. Finanzio, the tax underpayment may be as much as $270 million, rather than the $200 million estimate given by Mr. Mackay.
Testimony Does Nothing to Help Crown Case
The more that the Royal Commission digs, the more it seems unlikely that Crown Resorts will get its Melbourne license back. With additional testimony to come, it seems that a culture of deception and fraud is prevalent at the company. It goes far beyond gambling junkets and money laundering and appears to go into many parts of the company.
The big question now is whether the continued testimony will have a negative impact on those companies trying to purchase Crown Resorts. The Blackstone Group’s proposal hinges on the retention of the Melbourne license, so at this point, they seem the least likely suitor.
Star Entertainment Group could be the best suitor at this point as this would completely change the corporate structure of the company. Of course, will they opt to change its offer should Crown lose its Victorian license.
Finally, Oaktree Capital’s offer is the best to retain the current corporate structure but is that something they even want now. The main benefit from this offer is James Packer who stands to make billions from the sale of stock.
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