Billionaire casino owner James Packer has accepted that he made threats to an executive of an unnamed company in 2015, acknowledging his behaviour was both “shameful” and “disgraceful” and brought discredit on Crown Resorts, a public company which holds several casino licences.

But he said at the time he was dealing with serious illness, and that he was now “being treated for my bipolar”.

The nature of the threats, revealed in an email exchange from December 2015, was withheld from the public by the NSW Independent Liquor and Gaming Authority, which is currently inquiring into whether Crown Resorts is suitable to hold a casino licence in NSW.

As a close associate of Crown Resorts – he is the largest shareholder with 36% – Packer must also be deemed suitable.

Making a much awaited appearance from his $200m luxury super yacht, IJE, moored somewhere in the Pacific, Packer faced a barrage of questions about the emails, often answering slowly and quietly.

Looking puffy and overweight, Packer prefaced his appearance by saying that the “strong medications” he was on made it difficult for him to recall some events.

Asked whether he understood he was making a threat against the executive, referred to as Mr X, Packer said, “verbally yes”.

“Do you understand that Mr X was put in fear?” counsel assisting Adam Bell SC asked. “No, that came as a surprise,” Packer responded.

But he then agreed that the conduct, revealed in the emails, was both shameful and disgraceful. Asked whether he was under an obligation not to bring discredit on Crown, Packer replied: “I had clearly forgotten that.”

In December 2015, Packer was attempting to privatise Crown and buy back the 47% of shares he did not own. He was in talks with private equity, inducing the company referred to only as Z Co to contribute $1.5bn towards the then-buyout price of $9bn. In the emails about the deal, Z Co offered $400m subject to due diligence.

The rest of the discussion about the contents of the emails took place in private hearings.

When it returned, the commissioner hearing the inquiry, Patricia Bergin SC, asked:

“I assume you accept that as a director of a public company, the communications in the email were totally unacceptable for a director of a licensee of a casino?”

“Yes,” replied Packer, quietly.

Soon after the explosive email exchange in December 2015, Packer resigned as a director – he had earlier resigned as chairman. He returned briefly and eventually resigned again as a director in March 2018, due to health issues.

But when he resigned in 2015, the note to the ASX made no mention of Packer’s health issues. Packer said he had hoped his struggles with his health “would stay private”.

Bell had earlier asked Packer about his business relationship and friendship with Israeli billionaire, film producer and alleged arms dealer Arnon Milchan, whom Packer had described to biographer Damon Kitney as “the most charming and deadly person I have ever met”.

Asked what he meant about Milchan, Packer told the inquiry: “ I would hate to cross him and he is charming.”

He also said he had never confirmed that Milchan was involved in arms dealing for Israel’s top secret intelligence agency, Lekem, in the 1970s and 1980s. This was, however, reported in an unauthorised biography of Milchan in 2011 and later confirmed by former Israeli president Shimon Peres.

According to reports at the time, private equity groups had been approached to participate in the deal, including US private equity firm TPG, which later said it was not involved.

The privatisation did not proceed.

Packer also faced questions about his knowledge of Crown Resorts’ China operations and whether he was aware that Crown operated an unofficial office in Guangzhou. Nineteen Crown staff were arrested in October 2016 and held for over a year in a crackdown on foreign casinos that were soliciting Chinese high rollers.

Packer was not a director at the time of the arrests, but was said to be an executive at Crown. Packer said he either didn’t know or could not recall the details of the China operations.

Packer’s evidence will continue on Wednesday.