Crown Resorts Ltd (ASX: CWN) shares are on the rise in morning trade after director John Poynton became the latest member of the casino’s board to depart. At the time of writing, the Crown share price has edged 1.01% higher to $10.05.
Mr Poynton, who has been a member of the Crown board since 2018 and Burswood Limited (Crown Perth) since 2004, resigned on Monday morning.
Words from the chair
In a statement to the ASX, Crown Resorts chair and former Senator, Helen Coonan, said:
The [New South Wales] Independent Liquor and Gaming Authority (ILGA) has advised Crown that it considers it appropriate that John step down as a director of all companies within the Crown group, due to a perceived lack of independence arising out of his past relationship with Mr James Packer and CPH [Consolidated Press Holdings], notwithstanding the recent termination of John’s consultancy arrangement with CPH.
She added:
As a result, John has agreed to resign in the best interests of Crown and our shareholders, despite no adverse findings by the Commissioner in the ILGA inquiry to his suitability, integrity or performance.
Background to Crown’s woes
On 9 February, the NSW ILGA found Crown Resorts unsuitable to operate its new casino on the Sydney foreshore. James Packer was heavily implicated in the report.
The findings saw a string of resignations from Crown. According to the Sydney Morning Herald, Mr Poynton was the last of James Packer’s appointees to resign from the board. Mr Poynton had previously resigned from CPH as a last-ditch attempt to remain with Crown.
In addition to James Packer’s appointees, director Andrew Demetriou and CEO Ken Barton also left following recommendations from the ILGA.
After the NSW ILGA’s findings, the West Australian Government announced it too would launch an enquiry into the company’s holding of its gambling licence in the state.
Compounding the casino’s woes, the Victorian Government announced it would establish a royal commission into Crown’s suitability to hold a licence for its Melbourne casino.
Crown share price snapshot
Despite the turmoil facing the company, the Crown share price has held relatively steady in the year to date. In 2021, Crown shares have reached a low of $9.58 and a high of $10.25.
In the initial stages of the COVID-19 pandemic, the Crown share price collapsed to $6.00. Since then, the gaming operator has made a steady recovery.
Based on the current share price, Crown Resorts has market capitalisation of approximately $6.8 billion.
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Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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