By Sarah Danckert and Patrick Hatch
Crown Resorts director Harold Mitchell has told an inquiry into the casino group that the company should never have dealt with high rollers with criminal records and he hopes he never hears the word "junket" again.
Mr Mitchell, who has been a Crown director since 2011, was questioned about his knowledge of Crown's dealings with junket operators and high rollers with links to organised crime gangs and the group's troubles in China that led to the arrests of 19 Crown staff in 2016.
Harold Mitchell giving evidence to the Crown inquiry from his apartment.
The Independent Liquor and Gaming Authority inquiry was triggered by a series of reports by The Sydney Morning Herald, The Age and 60 Minutes last year about Crown's junket partners, its failure to stop money laundering at its Melbourne and Perth casinos and how it put its staff in danger of arrest in China.
Mr Mitchell, who counted media mogul Kerry Packer as a close business associate, defended his decision to remain on the board of Crown after a ruling earlier this year that he breached his duties as a director of Tennis Australia when he passed information in late 2012 to a third party, Bruce McWilliam at Seven Network, describing his infringement as "minor".
Mr Mitchell also defended his independence as a Crown director after it emerged he received a $1.9 million interest-free loan from Kerry Packer during the early 1990s recession that saved him from bankruptcy, saying Mr Packer was a kind man who helped many people.
Mr Mitchell was taken to reports on the criminal activities of one high roller Crown dealt with, Qiyun Zhou, and shown photos of Crown executive Barry Felstead with his arm around Mr Zhou. He was also taken to emails that showed Crown staff in China had been threatened with violence if they stopped advancing credit to Mr Zhou.
Mr Mitchell said these concerns were never reported to the board.
"It should have," he said.
Mr Mitchell was also adamant that Crown staff should have never engaged with such dubious figures.
"What we're talking about should not have happened."
Mr Mitchell said, as a member of the board, he was not specifically aware of the details of junket operators and, up until recently, he only had a vague understanding of what they did.
Asked by counsel assisting the inquiry Scott Aspinall: "Are you aware now what a junket is?"
Mr Mitchell responded: "I think for some time I heard the word, and I hope that I never hear it again."
He also told the inquiry that Crown's board did not review the bank accounts of two shell companies set up by the casino operator to make it easier for high rollers looking to gamble in Australia to avoid raising red flags with Chinese authorities cracking down on capital being taken out of the country.
"I had assumed the executives would," Mr Mitchell said.
Mr Mitchell's appearance followed James Packer's evidence to the inquiry about his influence over the group and its strategies.
Mr Packer delivered bombshell after bombshell during that evidence, including admitting he sent a threatening email to a private equity executive looking to privatise Crown. Mr Packer also revealed he accepted the inquiry might cap his stake in Crown, which currently sits at 36 per cent.
Mr Packer also disclosed he was the driving force behind the company's strategy to partner with junket operators and that he was aware of "rumours" about organised crime using such operators to launder money.
Mr Mitchell said that he did not give much thought to a question at Crown's annual general meeting last year about what private company information Crown shared with James Packer.
The inquiry has questioned whether current Crown chief executive Ken Barton misled shareholders by not disclosing the regular flow of information to its major shareholder.
"There probably should have been more information [in the answer], he said. "[But] I don't think it was misleading in any way."
Mr Mitchell said the shareholder who asked the question, shareholder activist Stephen Mayne, took up 90 per cent of the hour-long question and answer session and that his question "might have just passed over the top of me".
"I might not have paid as much attention to the exact words and exact answer given he was asking, and always does, so many questions," Mr Mitchell said.
The inquiry continues on Monday.
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