The ultimate ‘exit interview’ as Bell inquiry told of the human toll on staff at The Star

The former chief financial officer of The Star Entertainment Group (ASX: SGR) Christina Katsibouba wanted out at any cost, according to evidence presented to the second Bell inquiry into the casino group which also revealed today the human toll on employees trying to meet the demands of the NSW casino regulator.

Katsibouba was one of three former members of The Star’s group leadership team who gave evidence today before the inquiry, which is being led by Adam Bell SC to determine the company’s suitability to hold a casino licence.

The resignations of these company executives have provided key points of focus for Caspar Conde, special counsel assisting Bell, who has been probing the performance of The Star in its attempts to meet targets laid out by the NSW Independent Casino Commission (NICC) to restore the company’s casino licence.

Former chief customer and product officer George Hughes and former chief legal officer Betty Ivanoff also took the stand, exposing more of the inner workings of The Star under the leadership of former CEO Robbie Cooke.

The revelations could be considered the ultimate in “final exit” interviews for The Star.

Hughes told of the human toll that the suitability process is exacting on employees at The Star, among them Cooke himself.

Ivanoff, who joined The Star in May last year from Crown Resorts where she was group general counsel, surprisingly conceded that just two weeks into the CLO role at The Star she realised she may have made a career mistake.

Katsibouba, who resigned as interim CFO on 22 March, told the inquiry that she had informed the board of her decision to leave in December last year after a nine-year career with The Star.

But as late as 20 March, the inquiry revealed that Katsibouba was not sure whether her departure from the company would be classed as a resignation or as a contractual termination, with the former meaning the forfeiture of a potential FY24 short-term incentive cash payment.

Following questioning by Conde on any confusion over the nature of her departure from the company, Katsibouba said that as far as she was concerned, she had resigned without any concern for any financial loss that would result.

The former CFO revealed that she had informed Nicholas Weeks, who was appointed by the NICC as special manager of The Star in late 2022, of her intention to leave. She detailed several reasons for this, among them that her working relationship with the CEO and board had deteriorated.

Katsibouba had revealed in evidence yesterday that she also considered the group leadership team to be “dysfunctional and to have been dysfunctional for some time” and that she had lost “faith and confidence in the integrity of the CEO”.

Today, she told the inquiry that the board’s dysfunction was founded on a lack of appetite among the leadership team to “discuss and progress an adequate business plan that addresses earnings deterioration”.

This was a key point in Katsibouba’s evidence yesterday afternoon when she revealed that Cooke was reluctant to reveal to the leadership group “vulnerabilities of the balance sheet” that had concerned her.

Katsibouba’s today added that she felt the leadership team had neither the “ability (nor) the appetite” to tackle the issue.

$1 million 'outside my risk appetite'

Hughes, who had been with The Star since 2017, gave an upbeat assessment of the enthusiasm of staff at an operational level to ensure that the company regained control of its casino licence.

“Prior to the first Bell review it was certainly profit over compliance, but I saw that change in the ensuing period,” he told the inquiry.

“I saw a much deeper appreciation of risk management, governance and corporate culture.

“People were working remarkably hard and they were focused on regaining the trust and suitability of the business. I saw people really commit and work tirelessly to achieve change, but I also recognise that the leadership team wasn’t functioning as optimally as it could have.”

As chief customer and product officer at The Star, Hughes was in charge of the marketing and the premium services team as well as the centralised gaming unit.

However, an expansion of his role last year to include the centralised gaming unit and the premium services team made Hughes “uncomfortable”, led by the new responsibilities potentially exposing him to personal risk of up to $1 million under a new regulatory environment.

“The expansion of my role to include additional responsibilities put me in a position where I felt personal risk I have was outside my risk appetite,” said Hughes.

“I also was uncomfortable with the lack of progress on important business matters that I didn’t see was getting traction or focus. The workplace environment I felt was unsafe and very challenging.”

After revealing in December to then CEO Robbie Cooke of his intention to resign, Hughes formally tendered his resignation in February and remains on “gardening leave” until his official point of exit in May.

Hughes described a “lack of parameters, guidelines and policies to assure that the team was following approved practices” despite The Star being about 18 months into its remediation program to regain suitability.

“The stresses, pressures and expectations on our team to return to suitability were evident,” he said.

“I saw (it on) my colleagues; I was concerned about the pressure we were putting on people.”

Hughes said he even saw it in Cooke – “the toll on him”.

The “amount and urgency of the milestones” set by the NICC for The Star were critical factors in creating this stress, he said.

The inquiry was told yesterday that The Star had only reached “a fraction over 100" of the 638 milestones set out by the NICC, while the plan had been to close off 204 by 8 March this year.

When questioned directly by Bell on what he thought was going wrong at The Star, Hughes took his time to answer.

“I don’t think Robbie was leading the team as well as he should have been,” he said.

“Debate, discourse on material matters wasn’t encouraged. The agreed group leadership team governance, ways of working and meeting protocols had not been fully implemented.

“That led to, I think, a lack of clear communication, sharing of what was happening in the regulatory environment.”

Hughes said this led to “not a lot of time” being placed on focusing attention on the priority matters for the leadership team.

'Not in the right place'

Betty Ivanoff, the former chief legal officer, was the last witness called before day three of the Bell inquiry this afternoon.

Ivanoff, who as group general counsel at Crown Resorts had extensive experience in the Melbourne-based casino group’s transformation programs, resigned in March this year after just nine months in the role.

While Ivanoff praised The Star’s legal team as “one of the best” she has worked with in her career, she revealed to the inquiry that by the second week she had developed a feeling that she was “not in the right place”.

“It was a mixture of various factors,” she said.

“First of all, I did not feel like I was being engaged to the fullest extent as the chief legal officer.

“I did feel that I would be brought in and out of topics at whim by the CEO which I found quite awkward to say the least.

“Some of the frameworks and accountabilities were very unclear. I found there were areas that required clarity especially around decision making and accountabilities,

“From a transparency perspective … I wasn’t really getting the fullest picture.”

Ivanoff added that at times she felt “undermined or excluded” by the senior leadership at The Star.

The inquiry continues.