Crown Resorts investors sue over 2016 China arrests

Aggrieved shareholders have lodged a class suit against Australia-listed casino operator Crown Resorts Ltd. over the sharp drop in its share price following the arrests of 18 employees in China last year.

The Sydney Morning Herald reported that shareholders have accused Crown of keeping them in the dark on the risks of its marketing campaign in China. Law firm Maurice Blackburn (MB), which claims to represent hundreds of individual and institutional shareholders, leads the class suit against the casino operator.

MB’s head of class actions, Andrew Watson, claimed that investors were unaware of the risks that Crown was taking in China until 18 of its staff, including Australian executive Jason O’Connor, were arrested by Chinese authorities on charges of promoting gambling on the mainland in October 2016.

The plaintiffs lamented that they suffered undue losses when Crown’s share price dropped almost 14 percent on October 17, 2016, in the aftermath of the arrests. The worst part was Crown failed to inform them of the event or its likely impact, according to the shareholders.