A director of Crown Resorts and James Packer’s private investment company says it would have been “difficult” to resist the billionaire’s instructions, even after the casino mogul withdrew his active involvement in operations.

Michael Johnston on Tuesday said he approved the sale of a major stake in Crown from private company CPH Crown Holdings to Macau casino group Melco Resorts on Mr Packer’s insistence.

His evidence was given during an inquiry looking at Crown’s suitability to run a new casino at Sydney’s Barangaroo.

The inquiry is examining whether the sale agreement caused Crown to breach its gaming licence conditions, and what parties might have been associated with the licence as a result.

At the time of the deal, Mr Packer had stepped down as a director of Crown Resorts and of CPH Crown Holdings.

“When Mr Packer informed you that he was overruling you, that was something you could have resisted, isn’t it?” asked inquiry commissioner Patricia Bergin, referring to Mr Packer as a “non-director”.

“Yes, for a period,” Mr Johnston said.

But he ultimately agreed with Mr Packer on the sale so he did not have to make the “very difficult decision” to resist Mr Packer’s direction.

Pressed by Ms Bergin on why it would be difficult, Mr Johnston said Mr Packer could eventually have removed him from office, as the billionaire was still director of the ultimate parent company, CPH group.

Mr Johnston was also questioned over his involvement in reviewing and approving Crown’s relationships with junket operators. He said he did this as a consultant contracted by CPH Crown Holdings, despite also being a director of Crown Resorts with responsibility for overseeing management.

He agreed that the fact a 2017 letter from money laundering watchdog Austrac to Crown regarding a business associate’s criminal history was not escalated to him was a “serious oversight”.

Mr Packer was originally due to face the inquiry this week, but a revised schedule indicates he will likely give evidence on Tuesday.

Ms Bergin is expected to report back in early 2021.