This article is from the Australian Property Journal archive
THE Australian Securities and Investments Commissions (ASIC) has launched Federal Court proceedings against 11 current and former directors of The Star Entertainment Group, following inquiries into its NSW and Queensland operations that saw the company stripped of its Sydney casino licence and cop a $100 million fine.
The NSW inquiry heard allegations of criminal activity, money laundering and fraud on its Pyrmont premises.
“ASIC alleges that Star’s board and executives failed to give sufficient focus to the risk of money laundering and criminal associations, which are inherent in the operation of a large casino with an international customer base,” ASIC deputy chair Sarah Court said.
The $100 million fine handed down in October is the maximum penalty allowed under the NSW government’s new casino regulation laws introduced in August. The suspension of its Sydney licence stipulated that manager Nicholas Weeks would oversee operations for at least 90 days and until Star could show it is again fit to hold a licence following the findings of the Bell Report.
ASIC’s case includes claims against members of the Star board between 2017 to 2019, being former chair John O’Neill, former managing director and CEO Matthias Bekier, Kathleen Lahey, Richard Sheppard, Gerard Bradley, Sally Pitkin, Benjamin Heap and Zlatko Todorcevski.
Heap and Lahey are the current directors in the proceedings. Star noted in an ASX statement that itself and its subsidiaries are not parties to the proceedings.
Heap said, “Ms Lahey and I intend to contest the ASIC allegations, but to remain on the board beyond the transitional period would be a distraction to the company when remediation needs to be our unwavering focus. A search is currently underway for new directors”.
“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 corporate watchdog said.
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.
ASIC further alleges that Bekier and Star executives Paula Martin (former company secretary and group general counsel) and Greg Hawkins (former chief casino officer) breached their duties by not adequately addressing 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 not appropriately escalating money laundering issues to the board.
As for Martin and former CFO Harry Theodore, ASIC also alleges they knowingly permitted misleading statements being provided to NAB regarding the use of debit cards issued by China Union Pay International Ltd (CUP) at NAB ATMs located on Star’s premises. Those statements disguised the fact that Star was permitting CUP cards to be used for gambling, which was prohibited by CUP.
ASIC said it is aware over $900 million was obtained by Star customers using CUP cards in NAB ATMs from 2013 to 2019, and alleges that they, and Bekier, failed to report these matters to Star’s board.
