(Bloomberg) -- Crown Resorts Ltd.'s new Chief Executive Officer, Steve McCann, broke down with emotion on the witness stand at an inquiry into the company's Melbourne casino as he laid out his plans to transform the troubled gaming group.
The public probe, which has unearthed a likely years-long underpayment of gaming taxes by Crown, is assessing whether the company is fit to run its flagship casino in Australia's second-biggest city. A similar investigation in Sydney in February revealed years of money laundering at Crown's casinos, a lack of management oversight, and recommended a comprehensive overhaul.
Under sustained pressure Tuesday afternoon from questions by Meg O'Sullivan, counsel assisting the investigation, McCann struggled to contain his emotions as he explained how he would lift standards.
“What you walk past is what you condone,” said McCann, using a phrase he said had resonated with staff since he joined Crown on June 1. McCann said he'd asked employees to call out improper behavior, and speak up if they felt uncomfortable or coerced.
His voice breaking up, McCann said he wanted to ensure that “I'm not asking them to do something that's inconsistent with their values.” He struggled to complete the sentence.
Just weeks into the job, McCann is facing a regulatory onslaught that risks disabling Crown's entire Australian gaming operation. A concurrent investigation is determining whether Crown is fit to run its Perth casino. Gaming is yet to start at the company's new Sydney resort following the February report.
The Melbourne inquiry's recommendations are due by Oct. 15.
“I see evidence of misconduct or unacceptable behavior from people high-up and low down and in-between,” Commissioner Raymond Finkelstein, who is overseeing the investigation, said on Monday.
Crown's biggest shareholder is billionaire James Packer.
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In a tense exchange on Tuesday with O'Sullivan and Finkelstein, McCann said none of the briefing documents he received when he joined Crown mentioned an underpayment of taxes. He said he learned of the issue in a media report days later.
Crown said in a July 5 filing that it's reviewing the potential tax shortfall. According to the Sydney Morning Herald, the underpayment is as much as A$272 million ($206 million).
“The long-term viability and sustainability of Crown requires both a social license and a regulatory license,” McCann said later, after he'd been given a break to compose himself. “Crown can transform.”
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