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An inquiry likely to determine the fate of the Sydney casino licence of The Star Entertainment Group has warned the company it may have broken the law by delivering documents relevant to witness testimony two weeks after deadline.
After two days of damaging testimony, the third day of the second independent inquiry into Star Entertainment started disastrously for the company on Wednesday (April 17), with inquiry head Adam Bell SC set to decide if the company breached the Royal Commissions Act over late delivery of evidence.
Star Entertainment sent the inquiry a tranche of documents overnight, including some relating to Tuesday’s testimony of former CFO Christina Katsibouba, who alleged that former CEO Robbie Cooke withheld debt metrics from The Star casino’s external special manager Nicholas Weeks and the Star Entertainment board.
Katsibouba also alleged that investor relations head Giovanni Rizzo asked her to shield a A$3.2m ($2m) loss caused by a slots machine technical anomaly by adjusting the company’s half-year results.
Katsibouba resigned in March, and the company’s characterisation of her departure as “termination without cause” is also attracting inquiry scrutiny.
Bell started the day’s hearing by admonishing Star Entertainment over the inexplicably late delivery of “quite a large number of documents”.
“They ought to have been produced in answer to summons” by April 3, he said. “They’ve been produced two weeks late at a time when Ms. Katsibouba’s examination is at an advanced stage.”
Bell said he understood that all parties had been under pressure.
Nevertheless, he said, “I would appreciate the courtesy of an explanation, so I can form a view on whether an offence has been committed under … the Royal Commissions Act”.
Bell then adjourned the hearing for around two hours to allow counsel assisting to examine the documents and their relevance to Katsibouba’s testimony, but not before complaining this was at “considerable expense to all concerned”.
The previous day’s hearing ended with Star Entertainment’s external counsel, Bret Walker SC, aggressively questioning Katsibouba over the circumstances of her resignation and its impact on her severance, insinuating that her testimony was not fully plausible or truthful.
But after Bell’s demand this morning for an explanation for the late documents, Walker did not appear for Star.
Instead, a junior lawyer colleague told the inquiry that Walker had another engagement, adding that Star apologised for the late delivery, and that a statutory declaration on the matter would be sent to the inquiry as soon as possible.
In another bad omen for Star Entertainment, the hearing resumed with counsel assisting the inquiry, Caspar Conde, devoting the remainder of Katsibouba’s appearance to reinforcing her earlier testimony.
The significance of the late-arriving documents’ contents, if any, is yet to be made clear.
But Star Entertainment’s breach of protocol, and possibly the law, together with its counsel’s aggressive questioning of a former executive who alleged poor governance, heaps more pressure on Star after a bad start to the inquiry, and ahead of testimony of current staff in the weeks ahead.
On Monday, Conde showed the inquiry communications between former CEO Cooke and Star chairman David Foster that indicated the two were considering a shareholder class action and getting “ready for war” with special manager Weeks and the New South Wales (NSW) state gambling regulator.
Weeks was also shown what he called “extraordinary” evidence suggesting the senior leadership team had covertly monitored his communications and/or scheduling data on his Star email account, and that such information had been used to investigate at least one lawyer with whom Weeks was communicating.
NSW Independent Casino Commission (NICC) chair Philip Crawford, who ordered the second Bell inquiry into Star Entertainment’s suitability to regain a casino licence, has warned the company to be compliant by mid-year.
The inquiry’s report is due to be handed to the NICC by July 31.
