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Australia – Crown facing investor legal action over China arrests

By - 4 December 2017

Under fire Australian operator Crown Resorts is being sued by investors who claim they were not given enough information about the risks being taken in China where marketing the company’s casinos resulted in the arrest of 18 employees.

Class action specialists Maurice Blackburn Lawyers said the case was being brought on behalf of hundreds of investors following a steep share price drop of 14 per cent on October 17, 2016, when news of the arrests first broke. Employees were held for ten months, Crown was forced out of China and its VIP revenues in Australia were severely impacted.

Maurice Blackburn’s Head of Class actions Andrew Watson said: “Shareholders should have been appraised of the risks that Crown was taking in China and the threat they posed to the company’s revenue streams. Chinese authorities could not have made the risks of marketing gambling any plainer to Crown or other casino operators, yet Crown ignored these warnings. Fortunately in Australia, companies can be held accountable via the class action mechanism, for breaching their legal obligations to make timely and accurate disclosures to the market. Those failures affect many, many people.”

Crown, which has since sold of all its interests in its former Macau partnership with Melco, said: “The proceeding has been filed on behalf of persons who acquired an interest in Crown shares between February 6 2015 and October 16 2016. Crown will vigorously defend the proceeding.”

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