accounting times logo



Star gaming group wanted to fudge numbers, ex-CFO claims

18 April 2024
star gaming group wanted to fudge the numbers ex cfo claims

An inquiry heard Star Entertainment’s former CEO tried to hide the group’s financial troubles from executives while internal auditors intervened to prevent the books from being unlawfully altered.

Star Entertainment’s former CFO has accused the company of attempting to obscure the extent of its losses and the former CEO for not disclosing the extent of its debt troubles.

Christina Katsibouba told the Bell inquiry she had been planning on vacating her position of CFO – which she claimed had become “untenable” – sometime before her departure was announced last month.

The trouble went beyond the actions of any one individual and has renewed claims of a toxic culture.


On Monday, the inquiry heard evidence of a fraud event referred to as ‘Operation Varkaus’, in which patrons exploited a software defect that allowed them to withdraw more cash than they had earned.

Katsibouba claimed she was asked to move the losses incurred by that fraud event to a later, more favourable date by the group’s general manager of investor relations, Giovanni Rizzo.

She said the losses – of more than $3.2 million - were ultimately recorded at the correct date but that the company’s internal auditors were forced to intervene.

“The auditors didn’t come to me directly, but I know there was work done in the background to fix up the presentations on that page so that the losses appeared in the right column,” she said.

Katsibouba also commented on the differences of opinion she and the group’s former CEO, Robbie Cooke, seemed to have regarding internal financial disclosures.

“Robbie and I didn’t necessarily agree on how much disclosure we should have with our leadership team. My view was that we should be fully transparent with them … so the minds of that team could all focus on developing a business plan to address earnings,” she said.

“I thought the group was going through quite a tumultuous period and a lot of that had to do with the debt at the time and the implications that deteriorated earnings had on the debt itself.”

It was only when she shared news of the debt troubles mid-last year that the leadership team became aware of the extent of the concern.

She also said she had been “disappointed” by Cooke’s decision to submit an investment proposal to the board with figures that she or the financial team had not reviewed.

Katsibouba added she felt unsupported in her role and that it was increasingly difficult to secure time with Cooke.

The inquiry, run by Adam Bell SC, was commissioned to determine whether the Sydney casino’s licence should be reinstated after having been cancelled in 2022 following an initial review by Bell.

In his initial review, Bell found the casino had engaged in “inherently deceptive and unethical” behaviour.

The report also identified an ongoing auditing failure, contrary to the Star’s internal control manual (ICM) and standard operating procedure.

The issue of auditor independence is an ongoing focus of the Institute of Internal Auditors (IIA). In 2023, the Institute carried out a member survey to which 27 per cent of internal auditors reported feeling bullied, while another 26 per cent said their findings were ignored.

Thirteen per cent told the IIA that they were forced to change their reports and 20 per cent were forced to leave their workplace.

Trish Hyde, chief executive at the IIA, said directors have “three lines” of governance, risk, and assurance (GRC) at their disposal which, when combined give management and boards better information for strategic performance and reduce the likelihood of scandal.

The first two: self-assurance and internal assurance frameworks, are “most vulnerable to improper management activities.

“This is where the third line of independent internal audit, reporting findings directly to the Board, can make the difference between a stellar company and a burned-out star,” explained Hyde.

“In the case of Star, it appears they had all three lines in place, including internal audit. One can only ask what might have been if all voices were heard,” she added.

In response to the first Bell review, the NSW Independent Casino Commission suspended the casino’s licence indefinitely, fined it $100 million, and appointed manager, Nick Weeks.

Weeks was asked this week about his culpability in the casino’s wrongdoings, to which he answered the blame lies with the company itself.

“My view is that the role I have endeavoured to undertake here is that I’ve relied heavily on the company,” he said, adding “To the extent that there have been breaches of the ICMs, then they are breaches of Star’s.”


Join our subscribers get exclusive access to freebies and the latest news

Subscribe now!