Jets, yachts and magnums of Grange: inside Michael Gu’s life of luxury at The Star

In the lead-up to iProsperity’s collapse, Michael Gu lived the high life at Star, with the casino group asking no questions about his extravagance.

Michael Gu believed a Star Gold Coast casino staff member was rude after she turned her back to him.

International fugitive Michael Gu lived the high life at Star Entertainment – even when he “overextended” himself by millions of dollars, with the casino lavishing him with gifts, including a magnum of Grange wine and the use of its yacht and private jet.

So tight was Mr Gu’s relationship with Star that even when he swore and threatened one of its employees on the Gold Coast, one of the company’s executives urged the staff member – not Mr Gu – to apologise because she had not done her job “correctly”.

A royal commission-style inquiry into Star heard on Tuesday that the group performed no due diligence on Mr Gu when it offered him exclusive Diamond Club membership in 2018 and quickly offered him a $500,000 credit facility, with his VIP business perceived as a “big coup”.

Two years later, Mr Gu had fled the country – dubbed the new Christopher Skase – owing investors in his collapsed iProsperity Group some $350m.

But Star asked no questions about Mr Gu’s behaviour during his time as a client – even when iProsperity chief financial officer Harry Huang paid a $500,000 gambling debt for Mr Gu and deposited $100,000 into his ‘‘front money’’ account at Star. Mr Gu proposed to repay $2.8m in gambling debts using an iProsperity account, the inquiry heard.

The inquiry heard a “close” relationship blossomed between Mr Gu and Star’s vice-president of premium service operations, Mark Walker. Mr Gu offered Mr Walker a $1m-plus job, while Mr Walker suggested Mr Gu become an international junket operator and introduced him to other Star patrons to strike a potential development deal in Queensland.

Mr Walker said he was just “doing his job”, managing premium clients. But counsel assisting the inquiry Penelope Abdiel said Mr Walker had a blatant conflict of interest that clouded his judgment over Mr Gu, particularly during January 2019 when Mr Gu swore and allegedly threatened a female employee at Star’s Gold Coast Casino.

Mr Gu asked the female staff member to deposit the chips of another patron into his account, contrary to Star’s gambling policies. Mr Walker told the inquiry that Mr Gu believed the staff member was rude to him, prompting the alleged abuse.

“The problem was she said what she had to say and then she turned her back. So turning your back on him was an insult,” Mr Walker said. “Had she just handled it better we wouldn’t have been in the situation.”

The inquiry heard that Mr Gu had offered Mr Walker a job, because iProsperity was looking at buying casinos in Darwin and Canberra.

Mr Gu had offered him the role of chief executive of Aquis Entertainment and executive director of Blue Whale Entertainment, with a total remuneration package of $580,000 plus super and a $580,000 sign-on bonus.

Mr Walker said the job offer was a “nine month discussion”, which he had declared to his managers at The Star. But he conceded he did not make any disclosures in writing.

A day after receiving the job offer, Mr Walker recommended Star gift Mr Gu $100,000 worth of vouchers. He said he did not tell managers he received the job offer because he “didn’t want to keep bringing it up”.

Mr Walker also said he had no idea that iProsperity had become insolvent 12 months before its collapse, with Mr Gu and Mr Huang depositing $13m into their Star front money accounts during that time.

Ms Abdiel asked Mr Walker if he was “wilfully blind to the prospect that there was a possibility that Mr Gu might use (iProsperity) investor funds to pay down his gambling debts”.

“No, I don’t believe I was because I had known of his … (gambling) levels for the previous four or five years.

“And what he was doing was not unusual.”

The inquiry continues.