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Crown shares dive as China detains high-roller chief by Staff Writers Sydney (AFP) Oct 17, 2016
Shares in billionaire James Packer's Crown Resorts plunged Monday after 18 sales and marketing staff were detained in China, including an executive in charge of luring high-rollers to Australia. The gaming company's stock fell 13.9 percent to close in Sydney at Aus$11.15. It followed news that three Australians were among those hauled in for questioning by Chinese authorities on Thursday and Friday last week, with the company unable to contact them. "In relation to media reports on the weekend, Crown Resorts Limited believes that Crown's executive vice president VIP International, Jason O'Connor, is one of 18 Crown employees that have been detained by Chinese authorities," the company said in a statement Monday. "To date, Crown has not been able to speak with its employees and is working closely with the Department of Foreign Affairs and Trade to urgently make contact with and ascertain the welfare of its employees. "Crown is yet to be provided with details of why its employees have been detained." China's foreign ministry said in a statement to AFP that Australian nationals had been "criminally detained by Chinese authorities for suspected gambling offences". "The case is under investigation," it added. The Australian Broadcasting Corporation said it understood they were seized over soliciting Chinese high-rollers to gamble in overseas casinos. The Australian Financial Review reported they may have been targeted as part of "Operation Chain Break", aimed at stopping the illicit flow of funds into foreign casinos. Gaming companies are not allowed to explicitly advertise gambling in China. The newspaper said police raided houses in Shanghai, Beijing, Guangzhou and Chengdu. Australian Foreign Minister Julie Bishop said the government had been notified of the detention in Shanghai of three Australians among a number of Crown employees held across China. Consular officials were making "arrangements to visit the Australians to offer appropriate assistance, all of whom have legal representation provided by their employer", Bishop said in a statement. "The Australian Government is also providing consular support and information to the families in Australia, in consultation with Crown." Crown operates casinos across Australia and the world, including in Macau, where revenues have been hit hard by a Chinese corruption crackdown which has driven away many big-spenders. Macau gaming companies listed in Hong Kong's stock exchange also tumbled on the news, with Sands Macau and Galaxy Entertainment more than three percent down Monday. Graft has become endemic in China and President Xi Jinping launched a much-publicised anti-corruption drive after he came to power in 2012. Packer, who is engaged to pop diva Mariah Carey, owns 53 percent of Crown Resorts but resigned as chairman in 2015.
Tycoon Packer 'deeply concerned' for staff held in China The marketing staff were seized in raids late last week, including an executive in charge of luring high-rollers to Australia, with Beijing saying they had been "criminally detained ... for suspected gambling offences". Shares in Crown plunged more than 13 percent on Monday, but rebounded around two percent to Aus$11.40 when the market opened Tuesday. "As the major shareholder of Crown Resorts, I am deeply concerned for the welfare of those Crown employees detained in China," said billionaire Packer, who is engaged to pop diva Mariah Carey and is the company's largest shareholder. "Crown will do whatever it can to support our employees and their families at this difficult time. Our number one priority is to be able to make contact and to ensure they are all safe." The Crown board held an emergency meeting via phone late Monday amid reports that Chinese police were preparing to charge the employees with organising gambling activities for Chinese nationals overseas. Gaming companies are not allowed to explicitly advertise gambling in China. The Sydney Morning Herald said speculation among industry insiders linked the crisis to an attempt by Crown to collect Aus$15 million (US$11.4 million) in gambling debts from a Chinese high-roller at its Melbourne casino. "I have sought regular updates on this issue and have asked Crown to do everything possible to contact our employees and to support their families, as we await further details from Chinese authorities," added Packer. "I am respectful that these detentions have occurred in another country and are therefore subject to their sovereign rules and investigative processes." Crown operates casinos across Australia and the world, including in Macau, where revenues have been hit hard by a Chinese corruption crackdown that has driven away many big-spenders. Graft has become endemic in China and President Xi Jinping launched a much-publicised anti-corruption drive after he came to power in 2012. One of those being held is the company's executive vice president VIP International, Jason O'Connor, along with two other Australians. Australian Foreign Minister Julie Bishop said the government had been notified of their detention in Shanghai and consular officials were making arrangements to visit them.
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