‘Toxic culture’: Whistleblower’s complaint hangs over The Star’s former CEO

‘Toxic culture’: Whistleblower’s complaint hangs over The Star’s former CEO

Photo: The Star Gold Coast.

Robbie Cooke, the former CEO of The Star Entertainment Group (ASX: SGR), may have resigned from the company but the second Bell inquiry into the company’s suitability to hold a casino licence has heard today that a complaint from a whistleblower still hangs over the seasoned executive’s head – the second such complaint against Cooke in a matter of months.

The inquiry also heard sensational evidence today that former chief financial officer Christina Katsibouba was at odds with Cooke over a “special project” he had announced in March 2023 and that late last year she was kept in the dark over two reports issued to the company by the special manager overseeing the company’s remediation program.

While the nature of the whistleblower’s complaint has not been disclosed, the independent inquiry also heard that the unnamed insider reported that it was “widely agreed” that The Star was suffering from a “toxic culture” across the organisation.

Nicholas Weeks, the special manager appointed by the NSW Independent Casino Commission (NICC) to oversee a remediation of the casino group’s practices regarding safe gambling and money laundering, said the NICC was informed by The Star’s board of the whistleblower’s claims in December last year.

However, Adam Bell SC pointed out that the anonymous complainant, who also claimed that The Star’s board seemed “largely unconcerned” about the recommendations from the first Bell review and has assumed a “fightback stance”, has not been substantiated.

Bell further noted that Cooke had not yet responded to the allegations.

When questioned by Caspar Conde, counsel assisting Bell, about his view of the allegations made by the whistleblower, Weeks offered a more tempered perspective.

“Toxic is really a strong term that has been used in this complaint and (The Star) is a very large organisation,” Weeks told the inquiry.

“It has been reported that there are areas of The Star’s culture that need reform. I wouldn’t use the term toxic to describe the organisation’s broader culture.”

Weeks did concede that, based on evidence he gave yesterday, “some parallels” could be drawn with the allegations of a pushback from The Star over the remediation program the company has agreed to undertake to restore control of its casino licence.

The complaint against Cooke was made in December and came on the heels of an earlier complaint lodge in August or September last year by the same whistleblower.

Weeks told the inquiry that the matter has been referred to an external law firm to be investigated “expeditiously” and that he felt it would have been better to have the matter investigated prior to the Bell inquiry getting under way this week.

“As Mr Cooke remains a consultant of the firm, I think the imperative to move quickly with this investigation has not changed,” said Weeks.

Among the revelations from Weeks at today’s hearings were that The Star is falling behind its milestone targets in its remediation plan and is looking to seek an extension from the NICC.

An extensive series of focus groups with staff has revealed that most staff felt they were in the dark in terms of progress of the remediation plan.

Staff morale also is generally poor, with staff cuts over the past two years leading fewer people to do more work.

On the subject of how The Star is progressing with its remediation plan, Weeks said the company had reached “a fraction over 100" of the 638 milestones set out. The plan had been to close off 204 by 8 March this year.

However, it was the afternoon session that delivered the inquiry’s most sensational revelations so far as Katsibouba agreed with Bell’s assessment of her evidence that she experienced an “isolating” and “stressful” time as the second most senior executive at The Star with Cooke at the helm.

Former CFO alleges Cooke was reluctant to share concerns

Katsibouba quit as CFO last month after she had "lost faith and confidence in the integrity of the CEO", the inquiry was told.

She had been the interim CFO of The Star appointed after the departure of Harry Theodore in 2022 and her evidence today before the Bell inquiry revealed a somewhat challenging relationship with Cooke as CEO.

Among the revelations was that Cooke failed to disclose that he had received two reports from Weeks in November last year detailing The Star’s progress in its remediation program. When she did find out he had these reports in his possession, Katsibouba said she was not provided a copy of the reports even after requesting them.

Conde put it to Katsibouba that as the second most senior executive on The Star’s board it would have been unusual that she was not presented with a copy of the reports for her to review.

“I have never seen those reports,” she told the inquiry, adding that they were was an “important marker” for the special manager that would give the senior leadership of The Star “an early warning to the business on his view of progress”.

This was one of many incidents where Cooke kept important information close to his chest, as revealed by Katsibouba during her testimony today.

Early last year, Katsibouba raised concerns about The Star’s debt levels which she described as “vulnerabilities of the balance sheet”

“I sought to raise these vulnerabilities; I was wanting to raise it with the leadership team so there was a combined team effort in addressing the challenges,” said Katsibouba.

However, she told the inquiry that Cooke was “reluctant to share the concerns with the leadership team”.

“Robbie and I didn’t necessarily agree with how much disclosure we should have with our leadership team,” she said. “I felt we should be more transparent with them.”

After eventually sharing the information with the group leadership team in June last year, Katsibouba said some were concerned they were learning this for the first time.

Bell put it to Katsibouba that keeping this information from the leadership team would have been an “isolating” and “stressful” time for the CFO. She agreed.

The difficult relationship was also laid bare when Cooke proposed a “special project” to the board in about March last year.

While the nature of this project was kept from the public during the hearing, Conde confirmed with Katsibouba that this was a “material” initiative in terms of its financial importance to The Star. Katsibouba would later refer to the project as an “investment”.

Katsibouba said her initial response to the proposal was “negative”, an opinion she said was shared by the entire finance team.

However, in February this year she told the inquiry she learned that the same proposal had been presented to the board for approval despite the finance team’s negative opinion remaining unchanged almost a year later. A footnote at the bottom of the presentation revealed that the base case had yet to go to “final review by finance”.

Conde pointed to the “economic outcomes, base case column” as it appeared in the presentation and put it to Katsibouba that it contained information that “did not come from you or your team”. She agreed.

When asked by Conde to comment on this development, Katsibouba said that on a plain interpretation of the footnote “it would suggest that finance hasn’t yet undertaken a review”.

“My comment is we weren’t asked to provide a review of this paper and the numbers in there we have not looked at,” she said. “I do think business cases like this should involve finance.”

Katsibouba revealed that she was told by her team that the company’s general manager for strategy had “put together” the figures in the column and that she was “disappointed” that the figures were not run past the finance team.

The Star's shares fell by a further 14.32 per cent today to 41.5c - practically their lowest level ever and in stark contrast to their $1.29 level a year ago.

The hearing continues.

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