Crown Resorts is facing potential class action from shareholders in relation to the imprisonment of its staff in China, local media reports.
Crown Resorts shares dipped 14 percent when news broke of its employees being detained in China for allegedly enticing Chinese VIPs to gamble in its casinos.
According to the Sydney Morning Herald, law firm Maurice Blackburn from Friday will be accepting registrations from Crown Resorts shareholders interested in participating in the class action.
“The arrests in China occurred against the backdrop of Crown’s massive investment in its Sydney venture at Barangaroo, which has been spruiked as opening as a ‘VIP only’ casino and luxury resort in 2021,” said Maurice Blackburn Lawyers class action principal Julian Schimmel.
Schimmel said that Crown should have known it was possible to run into trouble with Chinese authorities after two South Korean gaming companies were reprimanded for the same crimes in 2015, and should have disclosed the risks of doing business in the Chinese market.
It is unknown what amount shareholders are seeking at this stage, but the class action will be available to any shareholder who purchased shares between June 2015 and October 14 of 2016.
“The action will be funded by International Litigation Funding Partners and is expected to involve institutional investors many of whom exited the stock or reduced their holdings during the share price rout,” said SMH.