Star Entertainment’s top lawyer has ‘varied recollection’ of key meetings as group created ‘misleading’ audit trail into Chinese junkets

Alvin Chau was considered an ‘astute businessman’ with Star removing all links to his triad gang past in an internal report created to mislead the gaming regulator.

Counsel assisting a royal commission-style inquiry into Star have accused chief legal and risk officer Paula Martin as not being “candid”, “honest”, “truthful” and “incompetent”.

Star Entertainment has been accused of attempting to mislead the NSW’s gaming regulator, stating that notorious Chinese junket operator Alvin Chau was an “astute businessman” and of “good repute”, removing all mentions to his links to triad criminal gangs in a key internal report.

In a risk assessment dated August last year, Star senior managers dismissed explosive evidence from the NSW inquiry into bigger rival Crown Resorts about Mr Chau’s criminal links as “rumour and innuendo”, declaring that the company could still do business with him.

It comes as Star’s chief legal and risk officer Paula Martin told a royal commission-style inquiry that she has “varied’” recollections of “important business meetings” over the past two years, including whether the casino group was monitoring suspicious transactions in bank accounts linked to Chinese gamblers.

Ms Martin has repeatedly given evidence that she “can’t recall” key events, some as late as August last year when she and other Star executives discussed whether to cease dealings with Mr Chau.

The lack of recall has prompted counsel assisting the inquiry to accuse Ms Martin of not being “candid”, “truthful”, “honest” and “incompetent”. The inquiry, headed by Adam Bell SC, has been extended by at least two weeks at considerable expense to taxpayers.

Ms Martin also conceded ‘secret’ board meetings where suspicions about Star’s biggest junket earner and that its international VIP business was “out of control” may have been discussed presented corporate governance “problems”.

Ms Martin said she had to rely on minutes of a meeting from last August, and not her memory, where Star’s ongoing dealings with Mr Chau were discussed. She said she did not receive a “phase one” report, which included how to deal with non-excluded patrons, including Mr Chau, despite “directing” the review.

“I don’t recall I was given this report,” she said on Thursday.

Counsel assisting the inquiry Naomi Sharp SC said: “Surely, you would take care to read documentation of direct relevance to review that you have directed?”

“Given the significance of this meeting, to agree that the prudent course of a senior lawyer would be to request a copy of any written briefing notes that exists so you may fully inform yourself?”

Ms Martin replied: “Not necessarily”.

The report dismissed explosive revelations from the NSW Bergin inquiry into bigger rival Crown Resorts about Mr Chau’s links to organised rime as “rumour and innuendo” and not grounds to ban him from its own casinos.

“Star could reasonably argue that evidence left during the inquiry that’s a reference to the Bergin inquiry did not substantiate the patron ever being a member of a triad group … that he has or has had any involvement in organised crime as such other than rumours and innuendo,” the report written by two of Ms Martins subordinates Kevin Houlihan and Andrew Power read.

“There is no irrefutable evidence, which may prevent the staff from continuing to engage with the patron. The patron is generally perceived as being a respected, astute business businessman who does not have any criminal convictions and who can be regarded as being of good repute.”

Mr Chau was arrested five months later after a two-year investigation by Macau Police uncovered an illegal gambling syndicate and money laundering. Star is yet to finalise whether it regards Mr Chau of “good repute”.

Ms Sharp said the report created a “misleading audit review in the event that any of the regulator’s came looking”, sparking a denial from Ms Martin.

“And the reason why you are so reluctant to acknowledge that you read this paper is because you are well aware that it contains highly misleading information, insofar as our Alvin Chau and Suncity are concerned?” Ms Sharp said. Ms Martin rejected this.

Late on Wednesday, Ms Sharp suggested the reason why Ms Martin was reluctant to give negative evidence about Mr Chau or Suncity was because the junket group had a joint venture with Star’s shareholder and Queensland development partner, Chow Tai Fook.

Suncity entered a joint venture with Chow Tai Fook in 2018 to build a $4bn “mega casino” in Vietnam. But Ms Martin said she was not aware of this joint venture before conceding that she had read some media reports on the partnership.

“I’m not sure Ms Sharp I have the entity details on that. I’m not sure I have the specific details,” Ms Martin said.

Ms Sharp asked Ms Martin if Suncity’s joint venture with Chow Tai Fook was the reason “why you are unwilling to give any evidence that might cast Suncity in a negative light?”

“No”, Ms Martin replied.

Ms Martin also said she could not recall a meeting with NAB following her appointment as chief risk officer in 2019 about suspicious transactions from Chinese gamblers via Star subsidiary, EEIS.

Adam Bell SC, who is heading the inquiry into Star, asked Ms Martin if that was an important business meeting. She agreed it was. Mr Bell then asked what was her recollection of important business meetings during the past two years.

“Varied, Mr Bell, depending on my role, and what I may have been commenting on my recollection is better on my purpose and role than it may be of others might do in those meetings. for example, or whether I was responsible for organising (the) meeting or attending to the actions. For example, I’m not sure I can generalise.”

Mr Bell asked Ms Martin about the informal phone hook-ups of directors which were not minuted and where she said Suncity’s suspicious behaviour at an exclusive gaming salon at Star’s Pyrmont casino and allegations of misconduct from Star’s international VIP team may have been discussed.

Mr Bell asked if all directors attended the “undocumented closed” board meetings, given the company only needs a quorum of two board members to hold a meeting.

Ms Martin replied that she could not recall, prompting Mr Bell to list the corporate governance problems such meetings presented.

“You agree that it‘s the principle of good corporate governance that material information should not be lost in undocumented closed sessions and directors,” Mr Bell said.

“And you’d agree in circumstances where all the board members may not have been present in these board courts that could give rise to differential levels of information between those members who are present and those members?”

Ms Martin sought to explain herself, saying if the matters were material they would be also discussed at formal board meetings. But minutes of those meetings make no mention to a litany of allegations of misconduct across Star’s international VIP business, nor do they mention repeated noncompliance and money laundering suspicions from its biggest junket earner Suncity at its Pyrmont casino.

This is despite Ms Martin telling the inquiry on Wednesday that both those matters may have been discussed in informal board phone hook-ups.

“If the same ground was covered at formal board meetings that would be minuted?” Mr Bell said.

“General topics would be, yes,” Ms Martin said. “But our minutes aren’t necessarily a transcript of the meeting.”

But Mr Bell said if significant or material information was discussed, it would be in formal minutes.

“As a general proposition, yes,” Ms Martin said.

The inquiry continues.