A lawyer representing Star Entertainment board directors has told an inquiry his clients were let down by management and should be spared the wrath of its findings.
The NSW Independent Liquor & Gaming Authority's inquiry into the suitability of Star to hold its Sydney casino licence has been examining allegations the casino enabled money laundering, organised crime, fraud and foreign interference.
Kate Richardson SC has argued the departure of senior managers and the steps it has begun taking ensure suitability and should be enough for Star to retain its licence.
The inquiry is on Monday hearing submissions from the company's non-executive directors, most of whom plan to retire from the board once the inquiry concludes.
Counsel assisting the inquiry Naomi Sharp SC submitted the board was at times passive and did not provide active stewardship of the company.
Michael Henry SC, representing the non-executive directors, submitted on Monday that was not the case and the board had been misled by management.
He said a number of submissions already made to the inquiry, regarding the use of China Union Pay cards and loan subsidiary EEIS, showed this and would be adopted in his submissions.
The directors had also accepted significant responsibility which reflected acknowledgement and insight.
Submissions that the board acted passively and without active stewardship of the company lacked evidence and would be "uninstructive" in determining Star's suitability to retain its licence however, Mr Henry submitted.
The claims were general in nature and lacked evidence, he said.
The inquiry has been told the board should have been more curious and involved, particularly in relation to the company's relationship with gang-linked junket operator Suncity and its private gaming room known as Salon 95, where an illicit cage operated.
Mr Henry submitted the board's attention was not drawn to the issue by management during a three-hour board meeting, and a "dot-point" about the service desk in Salon 95 where cash was exchanged for chips was "buried" in board papers.
"Without any attention being brought to it at the board meeting, the proposition that should prompt interrogation, we say is unreal," Mr Henry said.
Board meetings would last for weeks and become impracticable if directors were required to interrogate every detail buried in board papers, he said.
"It's wholly inadequate for management not to draw to the attention of the board, critical matters that may be buried somewhere in the board paper."
Even if the board had asked more questions, it's impossible to determine doing so would have made any difference to the Star's operations, Mr Henry said.
The board had also been misled about a KPMG report into the company's compliance with anti-money laundering and counter-terrorism financing laws and whether it had been shared with regulators.
The inquiry has been told the Star erroneously claimed legal professional privilege over the report when there was none and that it was withheld from the NSW gaming authority.
Its existence was disclosed to the Australian Transactions Reports and Analysis Centre but they were not immediately provided a full copy of the report.
Days before media reports that eventually sparked the inquiry, the board was told by management that allegations Star had concealed the KPMG report from the regulator could be potentially misleading if they were published.
"There's no mention in any delay in the provision of the reports to anyone ... the executives present would have been able to inform them of that fact, instead, they said (the claim) may be misleading," Mr Henry said.
The inquiry has adjourned to next Monday, expected to be the last day of hearings.
