New board needed to reform Star: director

·3-min read

A Star Entertainment director has conceded a clean-out of the beleaguered gaming company's board is needed to drive internal reform following evidence at an inquiry of "totally inappropriate conduct" at its Sydney casino.

The NSW gaming regulator is probing the fitness of Star to hold a Sydney casino licence in the wake of media reports claiming the ASX-listed company enabled suspected money laundering, organised crime, fraud and foreign interference.

Damning evidence has so far prompted the resignations of the gambling giant's chief executive Matt Bekier, chief financial officer Harry Theodore, chief casino officer Greg Hawkins, and chief legal and risk officer Paula Martin.

On Friday, Star director Sally Pitkin choked back tears when asked by Adam Bell SC, who is helming the inquiry, what she thought went wrong at the gambling company, saying there had been indifference about money laundering.

"That indifference has come about because of a failure to understand the harm that occurs from money laundering," she said.

Other contributors she said were Star trying to respond to competition from rival Crown Resorts which led to the VIP business to ignore rules, and a lack of capability in key roles, especially in its investigations department.

The inquiry has been told of shortcomings at Star's international arm, including its China Union Pay debit card scheme, assessment of junket operators, and problems in its exclusive gaming room Salon 95.

About $900 million flowed into Star until the CUP process, which disguised gaming chip purchases as hotel transactions, was stopped, while in Salon 95, accessed by notorious Macau-based junket operator Suncity, an illegal cage operated.

There has also been evidence of fake "source of funds" documents, in the form of letters, provided by Star to the Bank of China in Macau, which Ms Pitkin labelled as "totally inappropriate conduct" that created money laundering risks.

Ms Pitkin conceded it was ultimately the board that was responsible for failures at Star, saying "a new board needs to lead the company through the reform process".

"I offered to my colleagues to be the first director to step down from the board and I anticipate that will happen by the end of the financial year," Ms Pitkin said.

"Other directors will leave when it is appropriate for the company."

The board was working "at speed" to identify a replacement for Mr Bekier as Star chief executive, she also said.

Earlier, Ms Pitkin was quizzed about the gaming history of Chinese billionaire Huang Xiangmo, with the inquiry told the high-roller bought $1.7 billion worth of chips at Star venues until he was barred in 2019.

The inquiry was told Mr Huang was banned from Star after allegations surfaced he was an agent of influence for an overseas government.

"I understood from some board reports that he was a significant player. I became aware of the total quantum of his play in preparing for this review," Ms Pitkin said.

The inquiry was told that by March 5, 2018, in respect of Mr Huang, Star held copies of three different passports from the same country, with two different names used, and two different birthdates.

"I was not aware of that at the time," Ms Pitkin said.

"What, if any, comment do you have on that?" counsel assisting Caspar Conde asked.

"That would warrant investigation," the witness said.

The inquiry was told that neither Kevin Houlihan, the company's general manager of financial crime and investigations, nor anyone else at Star's investigations team was asked to probe the source of Mr Huang's wealth.

"I would have thought Mr Huang's source of wealth should have been investigated given he should have been a patron with a high-risk rating," Ms Pitkin said.

Star director Katie Lahey and chairman John O'Neill are the next witnesses due to front the inquiry, which continues.

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