Crown Resorts finally reached an agreement concerning the shareholder class-action that dates back to December 4, 2017, when it was commenced in Australia’s Federal Court. The case was referenced as “Zantran Pty Limited v Crown Resorts Limited, Federal Court Proceeding VID 1317/2017,” and the total settlement, interests and costs included, is $94.3 million (AU$125 million).
Crown Did Not Inform Its Shareholders of a Massive Decline
According to the lawsuit, Crown had a marketing campaign in China that led to a 14% decline in the company’s share price after 18 employees of the group were arrested in China in 2016. The issue here was that Crown did not inform its shareholders about any of this.
Australia’s leading law firm on class-action suits, Maurice Blackburn Lawyers, filed the suit against Crown. The National Head of Class Actions at Maurice Blackburn, Andrew Watson, stated at the time that Crown wanted to roll the dice on its VIP operations in China against connected to illegal gambling activities and the gamble resulted in a massive backfire.
As for Crown, it states that the settlement is subject to several conditions, one of which is approval from the Federal Court. In a statement, the operator said that it expects to recover a massive part of the settlement via its insurers, but at this stage, it is impossible to be certain of the outcome of the negotiations that will take place with the insurers.
Moreover, the statement noted that it is impossible to know the outcome of the formal steps that the operator will have to take in order to recover. The Board of Directors of Crown think that the settlement agreement was a commercial decision that was in its shareholder’s best interests.
Crown Has Had A Tough 2021
This year has proven to be extremely challenging for Crown Resorts. The operator is facings tons of problems across Australia. Back in February, the company was deemed unsuitable to hold license in New South Wales.
It faced a similar case in Victoria, as well, as it breached the Casino Control Act of Australia. In doing so, Crown Melbourne faced possible license suspension. To make things even worse, Barrister Adrian Finanzio SC stated back then that numerous high-end personas connected with Crown shouldn’t even be affiliated with the operator anymore, specifically Helen Coonan (executive chair) and Xavier Walsh (Crown’s CEO).
According to Finanzio, these obstacles led the public to lose its trust in the operator. Instead of focusing on its employees and providing patrons with the best gaming experience, the main focus of Crown has been misconduct in numerous fields.