Crown Resorts director Andrew Demetriou blames company culture for failures which led to the arrest of staff in China and dealings with dodgy junket operators.

The former AFL boss gave evidence on Monday to an inquiry into Crown’s suitability to operate a new casino at Sydney’s Barangaroo.

His questioning coincided with Crown alerting the ASX that Victoria’s gaming regulator had issued it with a show-cause notice over compliance issues relating to junket operators.

Mr Demetriou, who has sat on Crown’s board since 2015, told the inquiry that the company’s risk management processes were good but that important information was not escalated to the board.

“That is not a failure of our processes, but it speaks more of a failure of culture,” Mr Demetriou said.

“I come from a world where you give the good news and you give the bad news. You need to inform boards and be very transparent in your communication … and if the information flow is not forthcoming it makes it very difficult for the board to operate.”

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The inquiry has been told of an email to senior managers that suggested a Crown staffer in China might be at risk of experiencing physical violence, but the board was not told.

Mr Demetriou said he did not understand specifically that Crown had staff in China before the 2016 arrests.

The inquiry was partly sparked by media allegations that Crown’s casinos have facilitated organised crime and money laundering.

The NSW gaming regulator was also troubled by majority shareholder James Packer’s agreement to sell 19.99 per cent of the company to Melco Resorts.

James Packer gave evidence to the inquiry from his luxury yacht, moored in the South Pacific.

Mr Packer gave a “painful” few days of evidence at the NSW gaming inquiry last week, admitting he would not return to the boardroom and might have to sell some of his shareholding in the company.

Current and former directors are due to continue facing questions this week over the culture of casino giant Crown Resorts.

“This has been a terribly painful and shocking experience for the board, as it has been for me,” Mr Packer told the inquiry via video link from his luxury yacht in the South Pacific.

Melco is run by Lawrence Ho, and it was a condition of Crown’s licence that Mr Ho’s father, now deceased Stanley Ho, not gain an interest in the company.

The inquiry is scheduled to continue all week, with other directors including Crown chair and former Australian senator Helen Coonan scheduled to appear.

-AAP