The former chief risk officer for Star Entertainment Group says he doubted his own interpretation of an independent report he commissioned into the casino after the CEO rubbished its findings in a “very tense” meeting.
Paul McWilliams and former internal audit head Tarnya O’Neil commissioned a 2018 report from KPMG, where Mr McWilliams worked for several years, beginning in the late 1980s.
That report warned Star it was failing to combat money laundering and possible terrorism financing, incensing the company’s CEO and the chairman, who respectively disputed the accuracy of its findings and took issue with the language used.
The NSW Independent Liquor & Gaming Authority is investigating whether The Star Sydney is fit to keep its casino licence following media reports last year, stemming from the KPMG report, accusing the casino’s owner of enabling suspected money laundering, organised crime, fraud and foreign interference.
Ms O’Neil and KPMG partners Alexander Graham and Jeff O’Sullivan are also scheduled to appear as witnesses at the inquiry.
Mr McWilliams resumed giving evidence on Tuesday and said the KPMG pair were invited to be available for a May 2018 audit committee discussion of the report but sat in the waiting room and were never invited into the meeting.
Star CEO Matt Bekier did attend however, he said.
The last to arrive to the “very tense” meeting, Mr Bekier walked in “making a show of throwing (the report) on to the table … saying ‘I haven’t seen this’ … that it was unacceptable for the report to be prepared this way and was wrong in some respects,” Mr McWilliams told the inquiry.
The “broad theme” of Mr Bekier’s reaction was that the report contained multiple errors and KPMG did not know what they were doing, Mr McWilliams said.
The CEO’s reaction made him “wonder if there is in fact something materially wrong with the report”.
Chairman John O’Neill also took issue with the “tone and style of language” used in the report, but those concerns were not shared by Mr McWilliams.
He agreed the report found a fundamental deficiency in Star’s anti-money laundering and counter-terrorism financing program, as well as a lack of due diligence in relation to junkets, which made up about 12 per cent of Star’s revenue base in the 2019 financial year, and carried numerous risks relating to the source of funds being used to gamble.
The inquiry heard last week Star allowed high-rollers to bill $900 million as hotel expenses to dodge China’s tight anti-gambling and capital flight laws.
Star says it has an unwavering focus on preventing criminal activity at its casinos, which also include The Star Gold Coast and Treasury Brisbane.
The hearing continues.
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