Mr Demetriou told the inquiry, which has the same powers as a royal commission, the email was expressing his concerns at the time about Crown failing to strike the right balance between focusing on legal compliance and working on strategies to increase returns.
“It wasn’t meant in any way to diminish the importance of being compliant or regulated; they are absolutely critical,” he said. “But we had to find the right balance.”
The NSW inquiry is considering whether Crown should keep the licence to its new Sydney casino and was launched in response to revelations by The Age, The Sydney Morning Herald and 60 Minutes about Crown’s dealings with “junket” tours operators linked to criminal syndicates and failures to prevent money laundering at its Melbourne and Sydney casinos.
Despite holding that earlier view, Mr Demetriou conceded to the inquiry on Monday that Crown did not have a “robust” process in place to check its “junket” partners for criminal links and had failed to take money laundering risks seriously enough.
His evidence on Monday followed news on Friday that the Victorian Commission for Gambling and Liquor Regulation has issued Crown with a show cause notice asking it to explain why it should not be fined for failing to run proper due diligence on its junkets.
Mr Demetriou said junket probity checks were a “complex issue” and that some of the warnings in due diligence reports about its most important partners were “just allegations”. However, he agreed that Crown did not have a “robust process” for checking junkets for criminal links, contrary to a statement he and the rest of Crown’s board released in response to media reports last year.
Criminal links were missed because of a cultural problem in the company which resulted in red flags not being raised to the board or risk management committee, Mr Demetriou said. Several internal reviews were underway to “shift aspects of what we do” in that respect, he said.
Counsel assisting the inquiry Scott Aspinall asked what confidence the NSW government should have in Crown to run its new Sydney casino, set to open in December, given it had “deficiencies in the culture of compliance and you don’t know how long they’ll take to fix”.
“We’re in an infinitely better place today than we were last year and we were five years ago and we were six years ago,” Mr Demetriou responded. “We are well underway.”
Mr Demetriou also rejected the suggestion that Crown “turned a blind eye” to money laundering in regards to two shell companies the casino set up and used to open patron deposit bank accounts. On several occasions when Crown’s banks shut the accounts because they were being used for suspected money laundering, Crown opened new account with different banks.
Commissioner Patricia Bergin put to Mr Demetriou: “If you don’t stop it, if you actually seek to reopen those accounts in the face of those criticisms [from banks], a bystander might say … perhaps they are not taking it seriously,”
“I would agree with that proposition as distinct from turning a blind eye to it,” Mr Demetriou said.
“When you say that Crown ‘appears to be turning a blind eye’, it’s a reflection on all the very hard decent working people at Crown, including the very, very fine people who serve on the board.”
The inquiry’s public hearing on Monday was adjourned for around 10 minutes on Monday after Mr Demetriou admitted he was reading from notes while giving evidence under oath. He later apologised to the inquiry while his lawyer detailed the documents he had used to jog his memory so they could be submitted as evidence.
Mr Demetriou said the he joined Crown’s board in 2015 on Mr Packer’s invitation and has since been appointed chair of Crown’s risk management committee. He is also the chairman of Crown Melbourne, the licence holder of Crown’s Victorian casino, but said he had never read the state’s Casino Control Act.
Business reporter at The Age and Sydney Morning Herald.
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