The Crown Resorts Ltd (ASX: CWN) share price has come under pressure on Tuesday morning.
In early trade, the casino and resorts operator’s shares are down 1% to $12.24.
Why is the Crown share price falling?
Investors have been selling down the Crown share price this morning following the release of an announcement relating to an AUSTRAC investigation.
According to the release, Crown Melbourne and Crown Perth have been served with a statement of claim from AUSTRAC, commencing civil penalty proceedings. The regulator is alleging contraventions of obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
Though, these proceedings should not be a big surprise to shareholders. Management notes that in both its annual report and half year results, it warned that AUSTRAC’s investigation was very likely to result in civil penalty proceedings being commenced.
The company notes that the commencement of these proceedings follows a long-running investigation that commenced in October 2020. It also highlights that Crown Melbourne and Crown Perth have fully cooperated with AUSTRAC during the course of its investigation.
Furthermore, Crown has developed a comprehensive remediation plan which is intended to position it as a leader in the industry in its approach to governance, compliance, responsible gaming and the management of financial crime risk. This plan is underpinned by an uplifted organisational culture.
And while there are undoubtedly going to be fears that this could impact its takeover by Blackstone, it is worth noting that this was addressed in the implementation deed.
That deed states that “any fine announced, proposed, imposed or requested to be imposed by AUSTRAC on a Crown Group Member” is a Prescribed Regulatory Event and will not be treated as a “material adverse Change.”
AUSTRAC has not revealed any details regarding the penalties it is seeking to impose on Crown.
The post Crown (ASX:CWN) share price falls on AUSTRAC court proceedings news appeared first on The Motley Fool Australia.
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More reading
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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