‘Fear of Packer’ pushed Star to go rogue, says director

A Star Entertainment Group director says fear of competition from James Packer’s new Sydney casino at Barangaroo was a key reason the company embraced rogue behaviour that left it open to money laundering and criminal infiltration.

Sally Pitkin also told the NSW government inquiry into Star on Friday that the ASX-listed group knew a “new board needs to lead the company through the reform process and into the future” and that she had already offered to resign.

The inquiry – launched in response to a series of reports by the Sydney Morning Herald, The Age and 60 Minutes – has already led to a number of senior executives resigning, including chief executive Matt Bekier and chief financial officer Harry Theodore.

In the final days of public hearings, the inquiry is examining the Star board’s role in its numerous probity and ethical failings. These included its partnerships with “junket” tour groups linked to organised crime, its lax money laundering controls and its abuse of Chinese bank cards to facilitate $900 million of banned gambling transactions, which it then lied to its bank about.

Pitkin choked up on Friday when inquiry chair Adam Bell, SC, asked “what went wrong” at Star. She then gave an elucidating insight into the company’s catastrophic cultural failure.

She gave three reasons why otherwise good people developed an “indifference” to legal and ethical wrongdoing, starting with a “failure to understand the harm that comes from money laundering”.

Money laundering is a crucial element of organised criminal enterprise, as it disguises proceeds from drug and sex trafficking and other illicit activities as legitimate income, such as gambling winnings from a casino.

‘Crown was the company that benefited from the Packer influence and had these advantages, and Star was the underdog.’

Sally Pitkin, Star director

“Everyone in the organisation, from the board all the way through, needs to hear about the harm of money laundering,” said Pitkin, who has been on Star’s board for almost six and a half years and also chairs Super Retail Group. “Those stories will be very difficult, very uncomfortable – but they need to hear those stories.”