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Australia – ASIC launches proceedings against 11 current and former Star Entertainment directors and officers

By - 13 December 2022

ASIC (Australian Securities and Investments Commission) has commenced civil penalty proceedings in the Federal Court against 11 current and former directors and officers of The Star Entertainment Group Limited (Star) for alleged breaches of their duties under section 180 of the Corporations Act. 

ASIC Deputy Chair Sarah Court said, ‘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’s case includes claims against members of the Star Board between 2017 to 2019, being 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. 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 Mr 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.

Suncity was Star’s largest junket, with Star’s turnover from Suncity being approximately $2.1bn, $4bnand $5.9bn for the 2017, 2018 and 2019 financial years respectively. 

Breaches of director’s duties, s180 of the Corporations Act, attract a maximum penalty of $1,050,000 for each breach in the period 2017-2019.  

As to Ms Martin and Harry Theodore (former Chief Financial Officer), ASIC also alleges they knowingly permitted misleading statements being provided to National Australia Bank (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 is aware over $900 million was obtained by Star customers using CUP cards in NAB ATMs from 2013 to 2019. ASIC also alleges that they, and Mr Bekier, failed to report these matters to Star’s Board. 

ASIC Chair Joe Longo said the role of directors was critical to a company’s general standing and performance, including how a company deals with significant issues.  

“As I’ve said on many occasions, directors and officers are a critical part of the conduct of business in Australia. Their duty is to understand the operations of the company over which they preside, and the particular risks faced by the business. They are required to bring an inquiring mind to business operations. It is not ‘set and forget.”

Chairman of The Star, Mr Heap said: “At the recent Annual General Meeting, I committed to provide
stability during a period of significant leadership change and to ensure the Company is firmly on the
path back to suitability. That journey to become a better, more robust and more sustainable company
is in progress as necessary improvements continue to be embedded across systems, processes and

“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.

“I am proud and privileged to have had the opportunity to lead The Star during a difficult and important
time in the company’s history, and will continue to do so until an appropriate handover is complete. I
would like to take this opportunity to thank the Board and management for their support since becoming
Chairman earlier this year.”


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