On October 12, 2016, depending on how you see things, James Packer’s luck finally ran out — and no one outside Crown Resorts saw it coming. More than a dozen employees and former employees of the company were detained and later arrested and charged in China the fatal blow for an Asian strategy already beginning to reel.

Last week, the initial crisis came to an end when the employees learned they would be set free in coming months, but Crown is now in the midst of a wholesale strategic overhaul and asset sales program, licking its Asian wounds.

The crisis came during one of the periods when Packer had stepped away from the company, leaving its board entirely and hunkering down in Israel, where he had gained residency. Now, while loyal retainer John Alexander has been installed as executive chairman, Crikey understands Packer is very firmly back in charge of both strategy and day-to-day operations, with former chairman Rob Rankin and longtime chief executive Rowen Craigie both departing the company this year. Longtime board member Ben Brazil has also stepped down.

Packer has built a fearsome reputation for perfect timing in both selling assets — his $5.5 billion sale of Nine to private equity androids — and making astute investments at the bottom of the market in the technology sector, which allowed him to best his rivals in traditional media.

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[James Packer’s dilemma: try to save Crown staff in China, or let the chips fall where they may?]

His private investment company, Consolidated Press Holdings, has displayed a better understanding of digital media than flat-footed Australian newspaper executives, with the lone exception of News Corp’s Realestate.com.au, an asset now more valuable than its parent. Packer snatched cornerstone investments in Carsales.com.au and Seek.com.au.

Packer has faced business adversity and a very public dent to his reputation before in the $400 million investment in the financially and strategically inept mobile phone disaster One.Tel. Determined to prove One.Tel was a one-off, Packer proved his capacity for clear thinking and rebuilt his reputation in six years while in a crucible of personal despair stemming from his public humiliation and a fresh emotional battering from his volatile father, who used fear as a weapon of choice in his private and professional relationships.

Can Packer once more reinvent his business after a company-wide failure to understand some fairly basic stuff? China, its Chinese partners and how quickly political environments can change in Asia are basics. (The Philippines, where Crown has two casinos, has joined China in its anti-corruption program, hitting revenues in that country.)

There is little doubt Crown was singled out, perhaps because it exposed itself more by eschewing the middle men — or junket operators — traditionally used by big casino groups to attract their high-roller customers. But Crikey understands that Australia’s Star group and Australian casino operator SkyCity also had staff in China at the time of the Crown swoop. Some have questioned whether the well-connected Ho family were involved, in a squeeze to get Packer to sell out of Melco Crown (Packer’s relationship with Melco Crown partner Lawrence Ho has soured considerably).

There’s another element at play here too, and that’s the Australian government’s relentlessly bullish spin on business in China, wrapping itself in any successes while having distinctly hands-off attitude to any business failures. Success, it is often said, has many fathers, failure not so much. Once the Coalition government inked the Australia China Free Trade Agreement in 2014, the minsters for trade, Andrew Robb (who moved straight to working for a Chinese company after returning from politics) and his successor Steve Ciobo, have been relentlessly upbeat on the prospects for Australian companies in the world’s second-largest market by GDP. But the reality tells a different story. Governments, surely have an equal duty to be very clear about risks, along with the rewards of operating in the legal regulatory and competitive environment of places like China that are as different to Australia as the languages they speak.

Since its opening up and reform, China been a collective siren song luring foreign companies to its shores, yet at least as many big name corporations have crashed on the rocks as those that have safely navigated the dangerous shoals of Communist Party rules and in the increasingly powerful vested interests to which they are inextricably linked.

[Packer kowtows after cash cow slough, Macau Crown row]

While naturally a significant chunk of Crown’s failure should be sheeted home to its board, management and a distracted major shareholder it is also the latest example of a foreign company being singled out as an exemplar. Korean casino company Great Leisure, whose employees had suffered a similar fate in a very similar case two years earlier, was a warning sign. In the pharmaceutical sector GlaxoSmithKline suffered a similar fate to Crown’s, and a string of US technology companies including Google, Cisco Systems and IBM have been pushed out. Others like Facebook and Twitter are simply blocked by censors. These are just the big-name tips of the iceberg.

Still, all of this aside, financial markets understand that monopolies and oligopolies — as Crown is in the various states markets it operates in in Australia — remain licences to print money. Crown operates the only casinos in Melbourne and Perth and it will join Star as the second casino in Sydney. Its share price has bounced back from its pummeling last year, and as noted, Packer’s business skills, bolstered by unmatched political influence in Australia, are formidable. But other Australian businesses should look closely before swallowing the China hype Steve Ciobo and his colleagues are peddling.