Crown Resorts is in court facing a class action over share losses when its employees were detained in China on suspicion of the illegal marketing of its gambling services.
The company, 48% owned by billionaire James Packer, says it will vigorously defend proceedings against it in the Federal Court.
The shares fell nearly 14% on October 17 last year after the arrests.
“The significance of the detentions and later arrests is their impact on CWN’s future revenue from VIP gaming, in particular due to an expected decline in VIP patronage at CWN’s casinos,” says lawyers Maurice Blackburn.
“There is a compelling set of events suggesting that the company knew or should have known of the risks the Chinese environment posed to the company’s revenue streams, and therefore shareholders should have been apprised of those risks which should have been factored in to the share price.”
Crown shares are down 2% today to $12.08.