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Star Entertainment Group’s former directors and executives have come out swinging against allegations from the corporate watchdog of widespread lawbreaking at the group in defences filed in response to civil court action.
The eleven former directors and executives at the group, including the group’s former high-profile chairman John O’Neill and former chief executive Matt Bekier, have issued a near blanket denial to the allegations of breaches of director duties that were brought by the Australian Securities and Investments Commission.
Former Star chairman John O’Neill and CEO Matt Bekier are facing civil penalty cases brought by ASIC.Credit: James Alcock
ASIC launched civil court action against the 11 former senior staffers at the group in December, alleging they breached their duties by failing to give appropriate focus to the risk of money laundering and criminality at its casinos. Star Entertainment Group was not named as a defendant in the ASIC action and all named defendants are no longer at the company.
The strident defences of the executives and directors indicate ASIC is facing a significant and expensive fight over its extensive list of allegations against the directors and executives.
The defences were lodged as The Star’s new executive team fronted Macquarie’s investor conference after making 200 employees redundant on Thursday, with another 300 to lose their jobs in the coming weeks. Last month, The Star released a dire market update – its second this year – which revealed a planned restructure as its financial outlook had never looked worse.
The Star’s newly minted chief executive, Robbie Cooke, was questioned about the cuts on Thursday and gave a frank assessment of the group’s situation. The majority of the cuts are expected to be from The Star’s flagship Sydney casino’s 4000-strong workforce, with the brunt of the redundancies from its corporate divisions.
“There’s quite a lot of non-customer facing roles in the head count going,” he told investors on Thursday. “We’ve been very conscious of not wanting to drop service levels, not damaging the customer experience.”
Cooke agreed the casino organisation had become “cautious and conservative” since it emerged from the ashes of independent inquiries in Queensland and NSW which found The Star was unfit to hold its coveted casino licences over ongoing suspected breaches of anti-money laundering laws.
The ASIC action followed similar proceedings filed against the company in the Federal Court by the transaction regulator which could result in The Star paying hundreds of millions of dollars to AUSTRAC in the coming months.
The two state-level inquiries were launched after a 2021 investigation by The Sydney Morning Herald, The Age and 60 Minutes alleged The Star enabled suspected money laundering, organised crime, large-scale fraud and foreign interference in its Australian casinos for years, even though its board was warned its anti-laundering controls were failing.
The former directors – Ben Heap, Gerard Bradley, Sally Pitkin, Richard Sheppard, Katie Lahey, Zlatko Todorcevski – deny the allegations that they failed in their duties to ensure The Star’s anti-money laundering controls were fit for purpose.
The directors also say that their decisions were in the best interests of the company and were made in good faith. They also say they relied on advice provided by advisers and executives.
ASIC also targeted The Star’s former top brass in the civil suit, alleging that Bekier, and former group general counsel Paula Martin and former chief casino officer Greg Hawkins breached their duties through the group’s dealings with notorious junket operator Suncity and its funder, and continued to deal with the group despite becoming aware of its criminal links. The regulator also alleges the executives failed to escalate these matters to the board.
Bekier, Martin and Hawkins deny these allegations.
Bekier’s defence states: “He made business judgments in good faith and for a proper purpose, did not have a material personal interest in the subject matter of the judgments, informed himself about the subject matter of the judgments to the extent he believed to be appropriate and rationally believed that the judgments were in the best interests of Star.”
ASIC has also alleged in its suit that Martin and former chief financial officer Harry Theodore knowingly permitted misleading statements to be provided to National Australia Bank regarding the use of debit cards issued by a China Union Pay at NAB ATMs on The Star’s premises. The regulator alleges the statements disguised that Star was allowing the cards to be used for gambling which was prohibited by CUP. More than $900 million allegedly was obtained by Star’s punters through this scheme.
Martin and Theodore deny any allegation by ASIC that they acted inappropriately in dealings with CUP.
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