A big step for the inquiry

Melco Resorts will be forced to hand over nine legal documents pertaining to its purchase of a 20% stake in Crown Resorts as part of a public inquiry.

The Hong Kong-based casino operator is being investigated by the NSW (New South Wales) Independent Liquor and Gaming Authority (ILGA). The regulatory body began an inquiry into Crown Resorts’ operations in January. Among other allegations, it is looking into whether the $1.75bn sale of 20% of Crown to Lawrence Ho’s Melco last year breached the Australian operator’s Sydney casino license.

Melco has now lost its final bid

Earlier this year, Melco won an appeal against the ILGA allowing the operator to keep certain legally privileged documents private. However, this decision was subsequently overturned by the Court of Appeal. Melco has now lost its final bid to avoid providing the requested confidential papers.

The original decision overturned

Melco won the initial court battle to maintain the privacy of its documents by arguing that the Casino Control Act, used as the basis of the ILGA’s case, did not express its aim of abrogating a common law right. At the time, Justice Christine Adamson sided with Melco and denied the ILGA access to the documents.

the primary judge erred”

In March, after an appeal was launched by the state’s attorney general Mark Speakman, Judge Adamson’s decision was overturned by the NSW Court of Appeal. The court concluded that “the primary judge erred” and that the Royal Commission Act did confer a power to compel the production of legally privileged documents.

As a last resort, Melco took the case to the High Court, which announced on Wednesday it would support the Court of Appeal’s decision. Melco must now produce the nine documents to assist the ILGA in its inquiry.

The Melco-Crown case

The inquiry into Melco began after Crown revealed plans to build a $2.4bn casino hotel and luxury apartment tower in Sydney – set to open its doors next year. The casino’s license forbade the now-deceased Stanley Ho, father of Melco CEO Lawrence Ho, from any involvement in Crown’s casinos in view of alleged links with organized crime.

The IGLA intends to call on both James Packer, the founder of Crown Resorts, and Lawrence Ho to give evidence.

Melco distances itself

Once the inquiry resumes, it is unclear how much it will still focus on Melco. In April, the operator sold the last of its remaining 9.99% shares in Crown to The Blackstone Group. The sale registered a drop of 37.3% on the AU$880m ($574m) Melco paid initially.

The operator canceled its plans to transfer another AU$880m (US$591m) of Crown shares shortly after the inquiry began, stating that it needed to focus more on its businesses in Asia.

The death of Stanley Ho at the age of 98 last month is also expected to take the attention away from Melco.