Crown Resorts has settled for a huge sum ahead of a class action trial over business dealings in China where staff were arrested.
Crown Resorts reached a $125m deal with shareholders after its share price dropped following revelations employees were arrested in China for promoting illegal gambling.
The arrests prompted the Australian company’s share price to plummet 14 per cent in October 2016 and sparked a class action claim led by Maurice Blackburn Lawyers.
“Crown’s alleged failures in our case were part of what has become one of the most serious and comprehensive breakdowns in corporate governance in Australian history,” senior associate Michael Donelly said on Friday.
The company agreed to the deal on Friday after a trial was postponed twice this week.
The lawsuit was the only way the shareholders were able to take action effective against the gambling giant, he said.
The 19 Crown employees pleaded guilty to gambling offences and were convicted in June 2017.
The lawsuit claimed the company breached the ASIC Act and aimed to establish the company engaged in “misleading or deceptive” conduct.
Lawyers for the shareholders claimed Crown knew the employees were acting illegally in China and the company engaged in counter surveillance, including code words, removing logos and misleading authorities.