Star board 'misplaced' trust in management

Signage at The Star Casino in Sydney (file image)
An inquiry has been told trust was misplaced with The Star's management, leading to many failings. -AAP Image

Star Entertainment "misplaced" trust in a large number of senior managers who hid information from the board about controversial practices at the embattled casino operator, an inquiry has been told.

A royal commission-style inquiry is probing the ASX-listed company after media reports claiming it enabled suspected money laundering, organised crime, fraud and foreign interference at its venues, including The Star Sydney.

It has prompted a clean out at the gambling giant including managing director and chief executive Matt Bekier, chief financial officer Harry Theodore, chief casino officer Greg Hawkins, and chief legal and risk officer Paula Martin.

There was evidence on Monday that senior Star lawyer Andrew Power, group compliance manager Graeme Stevens, regulatory manager NSW David Alloi, general manager social responsibility Micheil Brodie and chief financial crime officer Skye Arnott have also resigned.

Star executive chairman John O'Neill is scheduled to give evidence later this week just days after flagging that he would step down from the board. 

Star announced on Monday that Ben Heap will assume the role of interim chairman, while Geoff Hogg will become acting chief executive. 

At the inquiry, Star director Richard Sheppard pointed to management being together "for a long period of time" for some of the casino operator's failings.

"The management had been doing things a certain way. There wasn't fresh eyes and a fresh approach ," he said.

On the board's role in the shortcomings, he said: "We possibly didn't ask enough questions, but I can absolutely assure you that the board asked lots of questions".

Unlike other organisations, he said at Star' "trust was misplaced" with management and the inquiry was told several senior casino managers hid information from the board, especially within the international rebate business.

Mr Sheppard urged more diversity on Star's board, including adding someone with a legal enforcement background, not a business background.

"Your present expectation is that you won't remain on the board after the AGM?" asked Adam Bell SC, who is helming the inquiry.

"That is correct," Mr Sheppard replied.

Many of Star's directors are expected to step down after testimony of mismanagement, making way for renewal at the company.

Directors Sally Pitkin and Gerard Bradley have already announced their intention to step down from the board.

Earlier, Andrew Bowen, former director of institutional banking industrials sector at NAB, was quizzed about what he knew of NAB-installed terminals at The Star Sydney where controversial China Union Pay cards were swiped.

The inquiry has been told that CUP card transactions were disguised as hotel accommodation charges to buy gambling chips in breach of China Union's rules.

Mr Bowen said his understanding was the terminals were located at Star Sydney's hotel, and "were not to be used for gaming or gambling-related purposes".

The inquiry continues.