Eleven current and former Star Entertainment directors and company officers are now the subject of civil penalty proceedings for alleged breaches of duties, brought by the Australian Securities and Investments Commission (ASIC).
The court action from the corporate regulator follows detailed revelations of money laundering and poor governance practices before two inquiries held in New South Wales and Queensland.
ASIC’s court action is focused on matters that occurred between 2017 and 2019 and it specifically names directors and executives who were on the board during the period of time that Star had dealings with junkets as well as the use of China UnionPay cards to facilitate gambling.
Current and former directors named in court documents are John O’Neill (former chair), Matthias Bekier (former managing director and CEO), Kathleen Lahey, Richard Sheppard, Gerard Bradley, Sally Pitkin, Benjamin Heap and Zlatko Todorcevski.
“ASIC alleges the Board members approved the expansion of Star’s relationship with certain individuals with reported criminal links, rather than addressing money laundering risk by inquiring into whether Star should be dealing with them,” the statement from the corporate regulator says.
“ASIC also alleges that Board members, when provided with information about money laundering risks affecting Star, did not take steps to make further enquiries of management about those critical risks and that this was a breach of their director duty obligations.”
Executives named in the court documents are Bekier, former company secretary and group general counsel Paula Martin, former casino officer Greg Hawkins, and former chief financial officer Harry Theodore.
Allegations made by the regulator against Bekier, Martin and Hawkins relate to breaches of duties linked to dealings with Junket operator, Star City.
ASIC alleges that Bekier, Martin and Hawkins did not adequately address “the money laundering risks that arose from dealing with Asian gambling junket Suncity and its funder, as well as continuing to deal with them despite becoming aware of reports of criminal links”, and that the three executives did not escalate money laundering concerns to the company’s board of directors.
Allegations against Martin and Theodore made by the regulator are that they made misleading statements to the National Australia Bank about the way in which the China UnionPay debit cards were being used at the casino.
“Those statements disguised the fact that Star was permitting CUP cards to be used for gambling, which was prohibited by CUP. ASIC is aware over $900 million was obtained by Star customers using CUP cards in NAB ATMs from 2013 to 2019,” the regulator says.
Court documents also allege that Bekier, Martin and Theodore failed to tell the company board about the debit cards being used for gambling despite China UnionPay having a specific prohibition on the use of cards for this purpose.
The news of the corporate regulator’s civil action against Star’s current and former directors and executives follows the Queensland Government’s disciplinary action against the casino operators announced last Friday.
That disciplinary action includes a deferred license suspension, $100 million in fines and the appointment of a special manager to monitor the progress of the running of the casino.
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