Special manager is the price of Crown’s survival

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O’Bryan’s job – in Finkelstein’s words – will be “to oversee all aspects of the casino’s operations”, “keep a watchful eye on the progress of reform” and “make sure that all rules and regulations are complied with”.

Crown won’t be too upset. In fact, it proposed the idea in a letter to the royal commission, and it was adopted in the final submissions of counsel assisting, Adrian Finanzio, SC.

But that only came after it sensed that Finkelstein was going down the road marked “unfit to hold a licence”. And also after it wrote to the government warning of “catastrophic” consequences for jobs and the government’s coffers.

 

O’Bryan is actually a great result.

He was the founding head of the state’s anti-corruption commission – the Independent Broad-based Anti-corruption Commission – from 2013-2017. So, if he does give his imprimatur to the regulator at the end of his two years it will be public recognition that Crown has cleaned up its act, and is a safe buy for investors.

Public guardian

Sure, it is an unusual step for a government to appoint what amounts to a public guardian over a listed company.

However, his job is not that different to a court-appointed receiver – usually a partner of a professional services firm – being asked to investigate a business and report back on whether it is viable.

O’Bryan is a legal blue blood. His father was a judge, his grandfather was a judge and his two brothers, Norman and Michael, also went to the bar and became silks. Michael was appointed to the Federal Court in 2019. Norman was a leading commercial barrister until his central role in the Banksia Securities class action scandal came to light.

O’Bryan became a barrister 1983 after he did a lot of work as a junior with Allan Myers, QC. He took silk in 2003 and has practised in administrative, commercial and trade practices law. However, he is not regarded by his peers as someone with a commercial mindset – like Myers – who could just as easily be running a company as providing legal advice.

But IBAC showed he knows how to set up an office and hire the right people.

Like IBAC, he will employ advisers on the commercial aspects of Crown’s operation and likely oversee the employment and training of new executives. And he won’t be like the legal advisers to Crown that Finkelstein criticised.

Those internal and external lawyers, Finkelstein said, “knew that Crown Melbourne was wanting to engage in conduct that contravened some laws, [but] failed to counsel Crown Melbourne not to go ahead”.

With O’Bryan in charge, the directors of Crown will have no more power than external advisers.

Finkelstein’s report says the special manager should have the power to “direct the board of directors of the casino operator to take particular action” or to “refrain from taking particular action” if that person believes it is in the best interests of the casino. It makes the bar on the special manager voting at board meetings almost meaningless, especially when he can sit in.

At least the chosen directors won’t be in the firing line regarding liability for losses incurred by investors, unlike those who served on the board in the period investigated by the royal commissions.

As Finkelstein said in his report, “the road forward will not be easy” because Crown Melbourne will not be in control of its destiny. O’Bryan will.



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