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05 March 2012

Crown Limited not substantial shareholder in Echo Entertainment - 1st March 2012

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Packer Gets 10 Percent In Echo Entertainment...

Media and gaming tycoon James Packer's Crown Ltd declared that it was not a substantial shareholder in Echo Entertainment, despite acquiring 10 percent of the rival casino group. Ken Barton, chief financial office for Crown, advised the company was "not a substantial holder of Echo for the purposes of the Corporations Act and therefore has no obligation to lodge a notice". Observers say this means Crown has not taken control of the 10 percent of Echo from Deutsche Bank, the investment bank believed to be the current owners of the shareholding.

Australian Casino kings James Packer and Larry Mullin war; Friendly or not?...

Top brass of The Star has issued a challenge to Crown Limited's James Packer to launch a full takeover bid if he desires a second Sydney casino.

A verbal has taken place between two of Australia's most high profile and successful gaming bosses as Larry Mullin, the CEO of Echo Entertainment - which runs The Star - railed at suggestions Mr Packer's Crown group wanted to use a stake of less than 20 per cent in Echo as the platform to build a $1 billion casino at Barangaroo.

Mr Mullin argued Mr Packer should not be allowed to build the casino without first taking over Echo Entertainment.

"There is only one casino licence (in Sydney)," he advised.

"If James Packer wants to get into this market the only way to do so is to launch a full takeover bid for Echo and reward all our shareholders."

Mr Packer was quick to reply, saying: "I don't expect Larry, as an American, to know Australian corporations law verbatim. Clearly he should spend more time studying before he ventures into that territory."

The knives started to come out as JP's bid for a Barangaroo casino received a boost from NSW Treasurer Mike Baird - who described it as a "bold" vision.

"I, for one, put my name on the table as someone that would welcome it as a great addition to Barangaroo, subject to the normal conditions," Mr Baird said.

Mr Mullin talked up the existing casino at Pyrmont, stating Echo's recent renovation program for The Star meant there was now "tremendous" growth potential for the venue's international VIP business that would flow through to the company's profits in coming years. He pointed to Echo accounts released last week showing overall VIP gaming revenues had doubled in the last six months.

Mr Mullin also broke his long standing silence on the sacking of The Star's former managing director, Sid Vaikunta.

He denied claims of a culture of covering up sexual harassment at the casino, saying: "We believe we reported everything appropriately."

Mr Mullin said he had known Mr Vaikunta "since 2002".

It is understood the two men worked together for about seven years at the Borgata Hotel and Casino in Atlantic City, USA.

Mr Mullin said an investigation limited what he could say publicly about his former colleague.
"I'm disappointed. It was someone I knew and respected and who had worked for us, and unfortunately he's moved on," he said.

It has been reported Mr Vaikunta was accused of "hitting on" a staff member in a limousine - and then a human resources manager at a staff function - in the space of two days.

A Media Man spokesperson / media commentator said "It appears to be a bit of a case that management forget they were now working out of Sin City Sydney... and not Las Vegas, where its well know that what happens in Vegas stays in Vegas. That's not usually the case in Sydney, despite the city being known for diversity and an open mind approach. This situation has made Echo Entertainment appear to be a softer target for some, which may include the likes of Crown Limited's James Packer."

Barrister Gail Furness SC is conducting the inquiry into his sacking on behalf of the NSW Casino, Liquor and Gaming Control Authority.

Stay turned to Media Man and Street Corner for more on this developing situation.

*the writer owns shares in Crown Limited

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