ANALYSIS: The relationship between commissioner Neville Owen and Kerry Stokes has unexpectedly become the big news to emerge from the Perth Casino Royal Commission.
ANALYSIS: The relationship between commissioner Neville Owen and Kerry Stokes has unexpectedly become the big news to emerge from the Perth Casino Royal Commission.
Its an intriguing story, partly because of what has already been said, but more so because of what has not yet been explained.
Its also an important story because of the personal and commercial relationships between Mr Stokes and several key players at Crown Resorts, including James Packer and John Alexander.
Adding to the sense of drama is the fierce campaign Mr Stokes’ daily newspaper has been waging against another key player: John Poynton.
Mr Stokes became part of the story last Monday, when Mr Owen declared he had a “close personal association” with the Seven West Media chairman.
That was designed to pre-empt any concerns about conflicts of interest ahead of the appearance of one of Mr Stokes’ key executives – Seven West Media’s WA chief executive Maryna Fewster – as a witness.
Mr Owen belatedly admitted late on Friday there was more to the relationship.
In response to media inquiries, Mr Owen acknowledged he was “a director of a company associated with the family interests of the chairman”.
That company is Clabon Pty Ltd.
It is not just an obscure shelf company; it holds all the shares in Australian Capital Equity, which is the central company in Mr Stokes’ extensive business empire.
Mr Owen insisted this did not raise any issues.
“I am satisfied that neither that, nor any other aspect of my personal association with the chairman, conflicts with my obligations to or in this royal commission,” he said, without any explanation.
What he failed to specify is that he is a director of three companies associated with Mr Stokes, including Redlake Enterprises Pty Ltd and Mercury Corporate Pty Ltd.
The purpose and activities of these low-profile companies is not known, but judging by the profile of their shared directors, they appear to play an important role in the Stokes empire.
As well as Mr Owen, the directors are Sydney-based David Gonski – one of Australia’s most powerful business advisers – along with former federal government minister Warwick Smith, and former WA premier Richard Court.
This is an extraordinarily powerful group and illustrates the circles Mr Stokes moves in.
Business News asked Mr Owen to expand on his disclosures last week and received a brief reply over the weekend.
“I have publicly declared my association with the chairman of Seven West Media, who is not the subject of this inquiry. I have nothing further to add.”
One powerbroker who has found himself on the outer is Mr Poynton, whose many roles have included being a director of Crown Resorts and chairman of Burswood Ltd, aka Crown Perth.
Like all Crown directors, Mr Poynton has plenty of questions to answer in light of the shocking revelations at NSW’s Bergin inquiry and Victoria’s royal commission.
His $50,000 per year consultancy agreement with James Packer, which required him to supply confidential information, was a particularly poor look, with Mr Poynton unable to explain why he signed it and acknowledging it created the potential for a conflict of interest.
The West Australian has seized upon this and other critical news.
Mr Poynton has featured in a succession of highly critical reports, most of which have appeared on page one or page three, replete with unflattering photos.
Reports on other witnesses have generally been well back in the news pages.
The popular Herd on the Terrace column on Saturday was devoted exclusively to rehashing old news on Mr Poynton.
The coverage in The West has noted, but given little weight to, the findings of NSW’s Bergin inquiry, which has already conducted a detailed review of Mr Poynton’s conduct at Crown.
It found he did not pass any confidential information to Mr Packer and concluded there was no real challenge to his credit or credibility as a director.
That’s just one inquiry; a different inquiry may reach a different conclusion, as Crown Resorts chair Helen Coonan may soon discover.
She was given a clean bill of health by Bergin, yet counsel assisting Victoria’s royal commission said last month Ms Coonan should be required to step down.
Nonetheless, Bergin’s findings should be front-of-mind when people assess Mr Poynton’s testimony.
The other witnesses last week did not deliver any surprises.
Ms Fewster, a recent addition to the Burswood board, was highly critical of what she found at the Crown group, saying the board meetings should have been more frequent, longer, and better organised.
Tim Roberts, who spent 13 years on the Burswood board, admitted he often attended via phone and had trouble recalling many details.
Overall, though, he did not see any red flags to warn of money laundering or links to organised crime, as Bergin found.
This week’s lineup of witnesses should be much more illuminating, particularly Barry Felstead.
He was a senior executive director at Crown Resorts for nearly 15 years and served on the board of Burswood up to his retirement late last year.
Bergin was highly critical of Mr Felstead, saying he ran the VIP International business as though it was a separate business from the rest of the company, and often reported direct to Mr Packer rather than the board as a whole.
Mr Felstead, who was based in Perth for much of his career, should know more about Crown’s local operations than anyone.
Two other people who could shed light on Crown’s WA operations are Mr Packer and Mr Alexander, but we are yet to learn if they will be called as witnesses.
Mr Packer was for many years the dominant figure at Crown Resorts while also being a long-term Burswood chair.
Mr Alexander was his key lieutenant at Crown Resorts and succeeded Mr Packer as chair at Burswood.
They also have close associations with Kerry Stokes.
Mr Alexander has been a director of Seven West Media since 2013, while Mr Packer has a range of commercial and personal connections to Mr Stokes.
In 2018, speaking at the Perth launch of the Packer biography The Price of Fortune, Mr Stokes revealed how he helped Mr Packer deal with the emotional upheaval in his life.
That year, the two men started investing together through a company called 2B Investments (Australia) Holdings.
Its early days at the Perth Casino Royal Commission and Mr Owen brings an impeccable record to his role.
His report on the HIH royal commission is widely considered the ‘bible’ for corporate governance in Australia and highlighted the importance of full disclosure and transparency.
It will be fascinating to see how Mr Owen and his fellow commissioners, Lindy Jenkins and Colin Murphy, manage the inquiry ahead of delivering their final report in March next year.
Equally intriguing will be the response of policymakers around the country.
One option is to dispense with local boards, like Burswood Ltd, and acknowledge the reality that Crown’s casinos and other operations are all controlled from head office in Melbourne.
The alternative, more radical solution, is to beef up the local boards and strengthen their supervisory powers – a move that would likely trigger a break-up of Crown.
That might throw up a big opportunity for a wealthy entrepreneur in the good books with the WA government, such as Kerry Stokes.
