Bergin Inquiry transcripts on the 2019 Crown AGM

Stephen Mayne: I'm suggesting that you're not communicating very well with your shareholders. What's the protocol with how we're communicating with Mr Packer? And he's just a shareholder. He's a big one, but he's just a shareholder. This is one probably for the independent directors. Is he getting access to company documents? Is he getting selectively briefed? Can he ring up and ask for a briefing on a scandal? So does he get special treatment? Does he get access to information? Or is he treated like me and he's looking at the ASX announcements for Crown's response to front page after front page of allegations?

The independent directors, despite being asked the question, stayed silent and CFO Ken Barton (now the CEO) quickly stepped up and replied as follows:

Ken Barton: If I could answer your question in the context of Crown's relationship with (Packer's private company) CPH, which is probably slightly broader than the question you asked. And you'll be aware, from our accounts and disclosures, that for an extended period of time, we've had an arrangement with CPH where they provide a range of services to Crown. Valuable services around our management, around our strategy. In order for them to fulfil those services we provide information to CPH. So that information is provided to them to enable them to prepare those services, and that's been disclosed for many years now in our accounts.

Now, here are the various transcripts from the Bergin Inquiry as directors and executives were asked about this exchange.

September 23, Ken Barton - see transcript.

MR BELL: I would like you to listen to this excerpt from the recording of the 2019 annual shareholders' meeting. Would you please play INQ.700.001.0018. INQ.700.001.0018.

RECORDING PLAYED

MR BELL: Mr Barton, that was you who answered the question from the shareholder, wasn't it?

MR BARTON: Yes, it was, Mr Bell.

MR BELL: And could I ask you to look at the transcript of the meeting, exhibit AA, tab 218, which is INQ.010.006.0312.

MR BARTON: Yes.

MR BELL: You will see that the question and answer we just heard starts at the bottom of page 8 and goes to the top of page 9 of the transcript, being the pages ending in the numbers .0319 and .0320.

MR BARTON: Yes, I see that.

MR BELL: And the question starting at the bottom of point 0319 is from Mr Stephen Mayne, which he said was a question for the independent directors. Do you see that?

MR BARTON: Yes, I see that.

MR BELL: And it was a question which focused, specifically, on communications with Mr Packer. Do you see that?

MR BARTON: Yes, I see that.

MR BELL: He asked if Mr Packer was getting access to company documents. Do you see that?

MR BARTON: Yes, I see that.

MR BELL: He asked whether Mr Packer was getting selectively briefed. Do you see that?

MR BARTON: Yes, I see that.

MR BELL: And he asked whether Mr Packer got special treatment. Do you see that?

MR BARTON: Yes, I see that.

MR BELL: Or whether Mr Packer was treated just like any other shareholder. Do you see that?

MR BARTON: Yes. Yes, I see that.

MR BELL: Now, if you look at the next page, .0320, you see that you interceded to answer that question which had been asked of the independent directors?

MR BARTON: Yes. I – I offered the chairman that I could make an initial comment on that.

MR BELL: And you referred to the services provided by CPH to Crown?

MR BARTON: Yes. I prefaced the question with a comment that it's in the context of Crown's broader relationship with CPH.

MR BELL: Yes. And you said that, in order to fulfil those services, information is provided to CPH; do you see that?

MR BARTON: Yes. Yes, I see that.

MR BELL: And you said that this had been disclosed for many years in the accounts; do you see that?

MR BARTON: Yes, I see that.

MR BELL: So your answer dealt only with the services agreement and did not refer at all to the controlling shareholder protocol which permitted confidential information to be provided to Mr Packer; correct?

MR BARTON: That's correct.

MR BELL: You hadn't forgotten about the controlling shareholder protocol when you chose to answer this question, had you?

MR BARTON: No. No, Mr Bell.

MR BELL: You deliberately misled the shareholders of Crown Resorts, Mr Barton, by failing to inform them about the controlling shareholder protocol when a direct question was asked.

MR BARTON: I asked – I answered the question, Mr Bell, and gave it the context that it was in a broader relationship in the broader context of CPH. The question, as I interpreted it, was directed to what information does our major shareholder get, being Mr Packer. I think people would generally accept that Mr Packer and CPH are both the parties who are a major shareholder and, in answering that question, I had regard to information which I knew was in the public domain, and knew was not subject to restrictions on disclosure, unlike the controlling shareholder protocol.

MR BELL: You deliberately misled the shareholders of Crown Resorts by failing to inform them about the controlling shareholder protocol, when a direct question was asked. That is the case, isn't it?

MR BARTON: No. No, Mr Bell. The question was directed to the information-sharing, and I answered it to the best I could based on information which was not subject to confidentiality restrictions.

MR BELL: You had been providing Mr Packer on, practically, a daily basis with confidential information of Crown which you knew, or understood, was authorised under the controlling shareholder protocol; correct?

MR BARTON: That's correct.

MR BELL: And the question that was asked of the independent directors was specifically focused on information provided to Mr Packer; correct?

MR BARTON: That's correct.

MR BELL: And you knew that Mr Packer was not entitled to information under the services agreement because he'd ceased to be a director of Crown Resorts and CPH; correct?

MR BARTON: Yes, which is why I answered the question in the context of CPHs relationship.

MR BELL: If you were concerned that the protocol was confidential, you could have truthfully said that you couldn't answer the question because of confidentiality restrictions, couldn't you?

MR BARTON: I could have answered it that way. He was attempting to be helpful to Mr Mayne to indicate that information was shared with CPH and – and trying to be helpful in giving him some context, the basis of the information-sharing.

MR BELL: Knowing what you knew about the control shareholding protocol and the extent to which you provided Mr Packer with information under it, I suggest to you that you gave a deliberately misleading response to the shareholders.

MR BARTON: I was trying to be helpful, Mr Bell, in indicating to Mr Mayne and the AGM that there were information sharing arrangements with CPH, and providing information to the extent I could, based on publicly available information.

MR BELL: Mr Mayne – you knew that Mr Mayne wasn't asking questions about information provided to CPH. He was focusing, specifically, on information provided to Mr Packer; that's the case, isn't it?

MR BARTON: That was the question he asked. Yes.

MR BELL: And the question that he posed was for the independent directors, which you interceded to answer; correct?

MR BARTON: That's correct.

MR BELL: Do you accept that you made a serious error of judgment in the way in which you chose to answer that question?

MR BARTON: No, I do not, Mr Bell.

COMMISSIONER: Why didn't you just tell him the truth, that you had been providing information to Mr Packer?

MR BARTON: Well, there's a confidentiality restriction in the controlling shareholder protocol.

COMMISSIONER: But that's about the document itself, isn't it?

MR BARTON: Yes, that's true.

COMMISSIONER: So couldn't you just say to him, in truth, “Yes, of course, I'm briefing Mr Packer on a daily basis.”

MR BARTON: Yes, that would have been a more complete answer, Commissioner.

COMMISSIONER: Well, it would have been a true one, wouldn't it?

MR BARTON: And it would have been a true answer, yes, Commissioner.

COMMISSIONER: Yes. All right. Yes, Mr Bell.

MR BELL: You tell this inquiry that you chose maintaining the perceived confidentiality of the arrangements with Mr Packer over telling the shareholders the truth?

MR BARTON: I gave the shareholders an indication of the existence of information-sharing regimes without being complete in answering the question in relation to Mr Packer.

————————————————————-

John Alexander - October 2 - see transcript

MR BELL: Could I ask you to look at exhibit AA218, INQ.010.006.0392.

MR ALEXANDER: Yes.

MR BELL: This is a transcript of the meeting, if I could ask you to turn to page 8 of the transcript, the page ending in .0319. I'd like to read you a question from the shareholder and the answer given by Mr Barton. The question is this:

Stephen Mayne: Okay. Now, what's the protocol? I mean, I'm suggesting that you're not communicating very well with your shareholders. What's the protocol with how we are communicating with Mr Packer? He's just a shareholder. He's a big one, but he's just a shareholder. So what is this – what is – this is one for the independent directors. So is he getting access to company documents? Is he getting selectively briefed? Did he ring up and ask for a briefing on the scandal? So is he – does he get special treatment? Does he get access to information? Or is he treated like me and he's looking at the ASX announcements for Crown's response to front page after front page of allegations?

Turn to the next page .0320, Mr Barton replied, he says:

Perhaps, chairman, if I could make – thanks for the question. And, I think, if I could answer your question in the context of Crown's relationship with CPH, it's probably slightly broader than the question you asked. And you'll be aware from our accounts and disclosures that, for an extended period of time, we've had an arrangement with CPH where they provide a range of services to Crown – valuable services – around our management, around our strategy. In order for them to fulfil those services, we provide information to CPH. So information is provided to them to enable them to prepare those services. That's been disclosed for many years now in our accounts, both the existence of those arrangements as well as the amounts that are being paid under those arrangements.

MR BELL: It's clear that Mr Barton was referring to the services agreement in his answer and failed to inform the shareholders about the controlling shareholder protocol of all the information which had been provided to Mr Packer since the 31st of October 2018; do you agree?

MR ALEXANDER: Yes.

MR BELL: And it was the controlling shareholder protocol which governed the provision of information to Mr Packer, personally, from the 31st of October 2018, because he was no longer a director of CPH or Crown Resorts.

MR ALEXANDER: Yes.

MR BELL: And it must have been clear to you, at the time of the meeting, that Mr Barton had not answered that question correctly?

MR ALEXANDER: It wasn't as clear to me at the time of the meeting. Obviously, I was aware of it, of the CSP and, on reflection, that information should have been provided.

MR BELL: Yes. And, as chairman of the meeting, it didn't occur to you to make a statement at that point, correcting what Mr Barton had said?

MR ALEXANDER: It didn't at the time. No.

MR BELL: Commissioner, I have no further questions.

COMMISSIONER: When did it become clear to you, Mr Alexander?

MR ALEXANDER: It became very clear through this process, Commissioner.

COMMISSIONER: So not until this year?

MR ALEXANDER: It wasn't something – I wasn't conscious of that. It wasn't something I was conscious of, as the meeting closed. No.

COMMISSIONER: Yes, because Mr Packer was not providing any services under the services agreement at any stage, was he?

MR ALEXANDER: Well, as I said earlier in my remarks, Mr Packer is, apart from the ‑ ‑ ‑

COMMISSIONER: That's a different matter, though, isn't it?

MR ALEXANDER: I'm sorry. I don't understand the distinction.

COMMISSIONER: The services agreement was for CPH executives to provide services in a regime under the services agreement, whereas Mr Packer was not providing services under that regime, was he?

MR ALEXANDER: That's correct.

COMMISSIONER: And the reference to Mr Barton's reference to “in order to fulfil those services” was particularly under the services agreement?

MR ALEXANDER: Yes, that's correct.

Harold Mitchell - October 9 - see transcript.

MR ASPINALL: Mr Mitchell, I just want to play you now a recording from the AGM last year. You may have seen it mentioned before. It's a question by Mr Stephen Mayne. It's INQ.700.001.0018. If you could listen to it for me as it is played.

RECORDING PLAYED

MR ASPINALL: Were you able to hear that, Mr Mitchell?

MR MITCHELL: Yes, I was, yes.

MR ASPINALL: You heard that Mr Mayne directed that question to the independents, “This is one for the independents.”

MR MITCHELL: He did, yes.

MR ASPINALL: And you were an independent director at the time, weren't you?

MR MITCHELL: Well, I still am, yes.

MR ASPINALL: And you knew at the time the answer was given that it wasn't the whole truth, didn't you?

MR MITCHELL: As I look at it now, there probably should have been more information. I didn't think it was misleading in any way, but was there something left out; maybe that was the case.

MR ASPINALL: So you don't accept that it wasn't the whole truth?

MR MITCHELL: There were other elements to it, yes, I agree. But Mr Packer did – no, I think it covered, I think it covered what had happened in my understanding of it, but you may want to lead me to something you felt was left out.

COMMISSIONER: You see, what Mr Barton said was that it was to do with the provision of information to enable services to be provided.

MR MITCHELL: Yes. Yes. Yes, and I think, Commissioner, that as I heard it again, I couldn't get it all but I got the gist of it, that I would have thought the shareholder agreement, as we say, which allowed information to Mr Packer under that - that whole agreement, was what would have been covered and I think that must have been in Mr Barton's mind but he would have known better than I. But I didn't think that - I don't think it was misleading anybody and it might be, Mr Aspinall, that there was a refinement that was left out and if that was there, I would accept it.

MR ASPINALL: Well, there was no refinement left out. Mr Mayne was asking fairly and squarely whether there was a special arrangement under which information was given to Mr Packer and whether he could ring up and ask for information that wasn't available to other shareholders. That was the question, wasn't it?

MR MITCHELL: That was the question, yes. And in its simplicity, Mr Mayne wasn't getting the information that Mr Packer was getting ‑ ‑ ‑

MR ASPINALL: You knew the answer to that question was yes, didn't you, because you had approved the entry into the controlling shareholder protocol?

MR MITCHELL: Yes.

MR ASPINALL: And you were aware that Mr Barton hadn't given that answer, yes.

MR MITCHELL: Now that I look at it, yes, I agree. At the time, a great big annual meeting. Matters come along. A question asked, answered. I didn't give it much more thought than all of that. No one was trying to lead – mislead Mr Mayne, I should say. I wasn't.

MR ASPINALL: Then why did you stand by and allow that answer to be given without standing up as a director and say “I would like to add to that answer that has been given by an independent director”?

MR MITCHELL: Mr Aspinall, I didn't give it any thought at the time.

COMMISSIONER: There is always a great deal of interest in what Mr Packer is doing and knowing in relation to Crown, isn't there; you would agree with that?

MR MITCHELL: Yes, Commissioner. Yes, I agree.

COMMISSIONER: Both in the larger community and also in the shareholding space; you would agree with that?

MR MITCHELL: I agree with that, yes.

COMMISSIONER: It wasn't an unreasonable question, was it?

MR MITCHELL: No, no, Commissioner. I think, Commissioner, to give it some context. I was at that meeting. There were questions for about 60 minutes or so. Mr Mayne asked questions for 90 per cent of the time. I might have just – it might have just passed over the top of me, I'd have to – I mean, if you've got one very good question to ask maybe you should make it the one but Mr Mayne asked questions of me which, I think, as you look at the transcript, I hopefully answered and answered property and truthfully and well. And I might not have paid as much attention to the exact words - the exact answer given that he was asking – and always has – so many questions, and I might not have given it all the attention that I should have. That would be my answer, Commissioner.

COMMISSIONER: Coming back, you have agreed that it wasn't an unreasonable question.

MR MITCHELL: No.

COMMISSIONER: And it should have been given a proper and honest answer, shouldn't it?

MR MITCHELL: I agree, Commissioner, yes of course.

COMMISSIONER: And with the independent directors being focused upon by the questioner ‑ ‑ ‑

MR MITCHELL: Yes.

COMMISSIONER: ‑ ‑ ‑ it should have been on the independent directors' minds to assist the company to give the shareholder, even if he were a small shareholder, an honest answer, do you not agree?

MR MITCHELL: Commissioner, I agree.

COMMISSIONER: Yes, Mr Aspinall.

MR ASPINALL: I have no further questions.

———————————————————————————————

Helen Coonan - October 16 - see transcript

MR BELL: Yes. Can I take you to another topic. You attended the Crown Resorts annual shareholders' meeting on the 23rd of October 2019?

MS COONAN: Yes.

MR BELL: And I'd just like to play you an excerpt from the meeting. Operator, can you please play INQ.700.001.0018.

RECORDING PLAYED

MR BELL: Ms Coonan, you understood that the shareholder's question was directed specifically to the information which was available to Mr Packer personally?

MS COONAN: Yes. I heard – I heard Mr Mayne's question.

MR BELL: Yes. And you understood that Mr Barton's response only related to the services agreement and didn't disclose the control be shareholder protocol?

MS COONAN: Mr Bell, I will explain why, but I'm not quite sure I did appreciate that the answer may not have been complete. I was, myself, up for election. And I was actually looking at some notes and Q and As and various other things. Mr Mayne asked me a number of questions. And if I'd realised that it was – that he hadn't got that information fulsomely, I would have certainly dealt with it. It was inadvertent.

MR BELL: Yes.

MS COONAN: But that's my explanation. And he – he asked me questions. He didn't ask me again. I'm not blaming Mr Mayne. I'm saying that I didn't appreciate the incompleteness of the answer at the time.

MR BELL: Yes. You do accept that the shareholders were entitled to completely truthful and completely accurate information in response to it?

MS COONAN: Yes, I do. I do.

MR BELL: And do you accept some responsibility for the fact that the shareholders, for whatever reason, were not given information which wasn't completely truthful and accurate?

MS COONAN: I think we always have to accept responsibility for not complete information, if that is warranted.

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