Star Boss Grilled Over Chinese Debit Cards

A senior risk manager has rejected claims she behaved unethically in her oversight of a controversial Chinese credit card scheme deployed for high rollers at The Star Sydney casino.

A NSW gaming regulator inquiry into the fitness of Star to hold a Sydney casino licence has prompted the resignation of its CEO Matt Bekier, who stepped down in March in the wake of issues raised at the probe.

Paula Martin, Star's chief legal and risk officer, on Tuesday was questioned about the operator's use of China Union Pay debit cards between 2013 and 2020, and whether a "sham" used the cards to purchase gaming chips.

Counsel assisting Naomi Sharp SC submitted that Ms Martin behaved "completely unethically" in approving an email response to NAB that misleadingly suggested people swiping the debit cards "had not done so to purchase gaming chips".

Star disguised gaming transactions on CUP cards as hotel accommodation in breach of China Union Pay's rules, the inquiry has previously been told.

"I don't think I was unethical, I think I acted in haste ... it's a very poor email on my part," Ms Martin said.

She also approved an $11 million dollar lift to high roller Phillip Dong Fang Lee's cheque cashing facility linked to a CUP card, and did not recall having an issue at the time about how much the VIP was debiting on it, the inquiry was told.

"Are you telling the truth at the moment?" Ms Sharp asked.

"I am," Ms Martin replied.

Earlier, the witness was grilled over a 2018 KPMG report critical of the casino operator's anti-money laundering processes.

The report noted a lack of anti-money laundering resources at Star, an inadequately documented risk assessment methodology and shortcomings in risk assessment of junkets.

Ms Martin told the inquiry it was not her recollection that Mr Bekier, in a meeting with KPMG representatives, was rude, aggressive, threw the report on the table or refused to make eye contact with the accounting firm's delegates.

Asked if Mr Bekier behaved in the meeting with "becoming conduct of the CEO of a publicly listed corporation," Ms Martin said she did not pay much attention to him, but conceded it was a tense meeting.

"Are you giving us your fullest recollection?" Ms Sharp asked.

"I believe I am because I was focused on my role in that room at the time," Ms Martin replied.

The inquiry was told that Ms Martin, a lawyer, claimed legal professional privilege over the KPMG report, which she believed was "in hindsight ... an error".

She rejected Ms Sharp's assertion that the claim of privilege over the KPMG report, and minutes of an internal casino meeting in which it was discussed, was part of an effort to shield documents from being disclosed to regulators.

She also denied the barrister's claim that she did not in fact refer to the privilege claim in the meeting, but that it was "something you just wrote afterwards".

"No, I believe the minutes would capture the discussion," the witness said.

Ms Sharp submitted: "You understand you can't just slap a legal professional privilege claim on any old report that gets commissioned by The Star, don't you?"

"Yes I understand that," Ms Martin replied.

The inquiry was told on the basis of the privilege claim Star did not give the report to AUSTRAC - the agency responsible for leon apostas anti-money laundering and counter-terrorism financing - until early 2020.

About that time, Ms Martin spoke with Mr Bekier, "the gist" of which was that the report should be handed over for the good of Star's relationship with AUSTRAC.

The inquiry continues on Wednesday.