Crown and Star Received Massive JobKeeper Payments
Both Crown Resorts and Star Entertainment received massive JobKeeper bailouts from the Australian government. The Australian Securities and Investments Commission (ASIC) published data on which companies received JobKeeper funds.
The government introduced the JobKeeper initiative during the height of the COVID-19 pandemic. It offered Australian companies vast sums of money to not sack their staff while the business was unable to operate normally.
Crown Resorts receive $92.9 million in JobKeeper payments in the 2020 fiscal year. In addition, it received another $198.3 million during the 2021 fiscal year. Money received was meant to cover the payrolls of companies. However, the $291.2 million Crown received went some way to cover penalties and pay dividends.
Member of Parliament Dr. Andrew Leigh is not happy about Crown potentially using JobKeeper funds for non-staff costs.
“JobKeeper went to French and Italian billionaires, to executive bonuses, and to hedge funds and investment banks.
Jeremy Hirschhorn is a commissioner with the Australian Taxation Office. He hoped companies used the money as intended. He, however, made some comments this week that gave those companies something to think about.
“In relation to the newer stimulus measures, please access them and use the proceeds to invest in your business. But also think twice if your plan is to access them simply to pay bigger dividends or executive bonuses.”
Crown’s JobKeeper Payments Second Largest in the Country
The $291.2 million Crown claimed puts it second on list of money received. Major airline Qantas banked an incredible $856 million. Qantas had 30,179 employees in 2019, but now has 22,000 having cut back operations.
Crown employs almost 20,000 staff across its Melbourne, Perth, and Sydney properties. Figures released to the Australian Stock Exchange show 10,341 Crown employees benefited from payments in Year 1. In addition, another 10,438 received payments in Year 2. However, Crown has made zero repayments to the government. It did pay $20 million to departing directors and posted a $261 million loss.
Star Entertainment, Crown’s arch-rivals, employs approximately 8,000 staff. It received $157 million in JobKeeper payments
SkyCity Entertainment accepted $23.2 million from the scheme. The New Zealand-based company operates a casino in Adelaide that has 880 staff. SkyCity voluntarily repaid $3,102,750 but kept the other $20.1 million despite posting a $149.5 million net profit for the 2020-21 financial year.
Paying Huge Sums to Departing Directors
It is fair to say it has been a terrible couple of years for Crown Resorts and its shareholders. Several enforced closures cost Crown $120.6 million. Group revenue falling 31.3% to $1,536.8 million did not help matters.
Neither did spending $54.6 million on Crown Sydney’s pre-opening, expected credit losses, and the underpayment of casino tax by its Melbourne property.
Crown paid $20 million to departing directors, too. This is ridiculous when you consider those directors ran the company into the ground. Those directors oversaw dodgy practices resulting in the company deemed unsuitable for a casino licence.
Ten of the 11 directors who appeared at last year’s AGM no longer work for Crown. Former CEO Ken Barton picked up a $3.35 million package. This despite the Bergin inquiry describing him as “no match for what is needed at the helm of a casino licensee.”
Former CEO of Australian Resort Barry Felsted received $3.2 million. Former Vice President of Strategy and Development Todd Nisbet collected $3.11 million. No wonder Crown’s shareholders revolted at the company’s executive pay plans.
Did Crown Use “Free Money” For China Lawsuit?
There is every chance Crown Resorts used JobKeeper payments to settle a lawsuit against it. Crown paid $125 million to settle a shareholder class-action lawsuit linked to the 2016 arrests of 19 staff members.
Crown shares lost 14% of their value on October 17, 2016. Why? Because Chinese police arrested 19 Crown staff for gambling-related issues. Sixteen went on to serve nine or ten months in jail.
Shareholders argued it was Crown’s duty to inform them of the shady operations in China. The Board argued the settlement was in the best interests of the company and its shareholders.
