Investors are giving Australian billionaire James Packer a rude welcome for his return to the Crown Resorts board.

The Sydney Morning Herald reported that Crown Resorts shareholders are preparing to file a class suit against the casino operator in connection with the arrest of its staff in China in November.

According to the report, the action is expected to involve institutional investors many of whom exited the stock or reduced their holdings during the share price rout. Law firm Maurice Blackburn will handle the suit while it will be funded by International Litigation Funding Partners.

Julian Schimmel, who is the class action principal of Maurice Blackburn Lawyers, said Crown Resorts should have informed investors about the risks that the company faces in doing business in China, especially upon learning that there had been cases of arrests in connection with marketing junkets.