A director of Crown Resorts and James Packer's private investment company says it would have been "difficult" to resist the billionaire's instructions, even after the casino mogul withdrew his active involvement in operations.
Michael Johnston on Tuesday said he approved the sale of a major stake in Crown from private company CPH Crown Holdings to Macau casino group Melco Resorts on Mr Packer's insistence.
His evidence was given during an inquiry looking at Crown's suitability to run a new casino at Sydney's Barangaroo.
The inquiry is examining whether the sale agreement caused Crown to breach its gaming licence conditions, and what parties might have been associated with the licence as a result.
The NSW government was concerned that Stanley Ho, a billionaire with alleged links to organised crime, would gain an interest in a casino in the state. Dr Ho's son Lawrence Ho controls Melco Resorts.
At the time of the deal, Mr Packer had stepped down as a director of Crown Resorts and of CPH Crown Holdings.
"When Mr Packer informed you that he was overruling you, that was something you could have resisted, isn't it?" asked inquiry commissioner Patricia Bergin, referring to Mr Packer as a "non-director".
"Yes, for a period," Mr Johnston said.
But he ultimately agreed with Mr Packer on the sale so he did not have to make the "very difficult decision" to resist.
Pressed by Ms Bergin on why it would be difficult, Mr Johnston said Mr Packer could eventually have removed him from office, as the billionaire was still director of the ultimate parent company of the CPH group, Consolidated Press International Holdings.
Mr Johnston and fellow Crown Resorts director Guy Jalland have been quizzed on potential conflicts arising from their involvement in the sale to Melco. Both men were involved in the deal but did not inform Crown.
Mr Jalland is chief executive of Consolidated Press Holdings (CPH), another company in the CPH group.
Mr Jalland shared confidential Crown information with Melco before the sale, which he was permitted to do under an agreement.
Ms Bergin asked Mr Jalland if he understood that as a Crown director he had an obligation not to bring harm to the company.
Mr Jalland insisted he did not believe the transaction exposed Crown to risk because he did not believe Dr Ho had any interest in Melco Resorts.
"Weighing up those two (duties) at a time when you had an obligation to a company that had a burden to tell the government what it was up to in respect of Dr Ho, as you recall, it could be perceived that you were in a position of conflict, would you not agree?" Ms Bergin asked.
"I don't agree because Dr Ho had nothing to do with this transaction," Mr Jalland responded.
He later conceded it "could be perceived" that he had a conflict.
Melco Resorts has since sold its share in Crown.
Mr Johnston was also questioned over his involvement in reviewing and approving Crown's relationships with junket operators. He said he did this as a consultant contracted by CPH Crown Holdings despite also being a director of Crown Resorts with responsibility for overseeing management.
He agreed that the fact a 2017 letter from money laundering watchdog Austrac to Crown regarding a business associate's criminal history was not escalated to him was a "serious oversight".
Mr Packer was originally due to face the inquiry this week but a revised schedule indicates he will likely give evidence next Tuesday.
Ms Bergin is expected to report back in early 2021.