Casino operator Melco Resorts & Entertainment (MRE) has won its court challenge of an Australian gambling regulator’s demand for certain company documents.
On Tuesday, the New South Wales Supreme Court ruled that the NSW Independent Liquor & Gaming Authority (ILGA) lacked the legal authority to compel MRE to produce documents detailing MRE CEO Lawrence Ho’s connections to companies linked to his father Stanley.
The ILGA launched its inquiry last year after MRE struck a deal to buy a nearly 20% stake in Australian casino operator Crown Resorts. NSW regulators had previously imposed a condition on Crown’s Sydney casino project that the company have no dealings with Stanley Ho due to his alleged ties to Hong Kong triads.
When the ILGA discovered that Lawrence Ho held director positions in companies linked to Stanley, it launched an inquiry into Lawrence’s suitability. MRE paused its Crown deal after acquiring the first 10% tranche but announced last week that it was abandoning its pursuit of the remaining 10%, saying it needed to focus on its existing operations in Macau and the Philippines while the coronavirus crisis rages on.
One day before that announcement, MRE filed its legal challenge of the ILGA’s document hunt on the grounds that the documents were protected by attorney-client privilege. MRE also questioned whether the ILGA could exercise aspects of Australian law that would allow the regulator to override such privileges.
On Tuesday, NSW Supreme Court Justice Christine Adamson sided with MRE, saying the NSW parliament hadn’t expressly granted the ILGA the powers allowed under the Royal Commission Act and the courts “ought not be left to guess” as to parliament’s intentions. As such, MRE’s legal privileges “are not abrogated for the purposes of an inquiry.”
MRE’s decision to forego acquiring additional Crown shares also included the company dropping its right to add directors to Crown’s board. The ILGA will therefore have no need to probe the suitability of these MRE executives. An ILGA spokesman said the regulator was “considering today’s court judgment and how it may impact the running of the inquiry.”
