(Reuters) - Crown Resorts CWN.AX appointed a new chairwoman and a chief executive on Friday in a major management reshuffle, as Australia's biggest casino operator seeks to navigate through regulatory probes and falling profits.
The move comes days amid investigations by the gaming authorities in the state of New South Wales on whether Crown's billionaire founder James Packer can proceed with his proposed A$1.2 billion ($820 million) partial sale of the company to Hong Kong's Melco Resorts & Entertainment MLCO.O.
Crown said on Friday Chairman John Alexander will be stepping down and named executive director Helen Coonan as chairwoman, while Chief Financial Officer Ken Barton was elevated to chief executive, a role which has been vacant for about three years.
“Alexander stepping down is not a good thing but the greater problem that they do seem to have is all the issues related to the sale to Melco,” said Dale Raynes, associate director at CPS Capital.
“They needed to tighten the ship and prove that they have the relevant management in place.”
Alexander will remain an executive director to assist with the transition of the chairman and chief executive roles, Crown said in a statement.
“This new structure is in line with feedback we have received from a number of proxy advisers and shareholders and better aligns with contemporary governance practices,” incoming chairwoman Coonan said in the statement.
Packer froze the stake sale to Melco last year due to the probe into alleged criminal activity at Crown’s Australian operations following media allegations that it had engaged in money-laundering, breached gambling laws and partnered with tour operators linked to organized crime.
Crown has denied the allegations.
The probe will include a public investigation into whether Melco has any corporate or business connections with its CEO’s father Stanley Ho who had been investigated by Australian authorities for possible ties to organized crime.
Melco has said Ho was not involved in its business.
Hearings are due to resume in late February and lawyers leading the inquiry said Packer himself would be called to give evidence.
Crown is also under financial pressure due to reduced spending by Chinese tourists, which contributed to a 4.7% drop in its annual profit last year.
Reporting by Aby Jose Koilparambil in Bengaluru; Additional reporting by Paulina Duran in Sydney; Editing by Sam Holmes and Muralikumar Anantharaman
Our Standards: The Thomson Reuters Trust Principles.