December 13, 2022 | By Bronwen Largier
The Star Entertainment Group was fined $100 million and hit with other disciplinary action by the Queensland Government on Friday, after a review found the business unsuitable to hold a casino licence in the state, across operations in Brisbane and the Gold Coast.
And today, ASIC – the Australian Securities and Investments Commission – has launched federal court action against 11 current and former leaders of The Star, including board members and operational leaders.
Aside from the hefty fine, the Queensland Government has appointed the same special manager currently in charge at The Star Sydney – Nicholas Weeks – to oversee operations at both The Star Gold Coast and Treasury Brisbane.
However, unlike The Star Sydney, the Queensland casinos have not had their licences immediately suspended – a 90-day suspension has been deferred to begin on December 1, 2023, if the company has not significantly addressed the issues which led to the finding of unsuitability to hold a gaming licence, as per the review report released in October.
“Queensland casinos must operate with integrity – and it is clear that there have been major failings by The Star group and its entities,” said the state’s attorney-general and minister for justice Shannon Fentiman.
“Like many Queenslanders, I was appalled at the extent of the actions of The Star in welcoming excluded persons to their casinos and the exorbitant incentives on offer for questionable gamblers.
“And I can assure Queenslanders that The Star will be sent the bill for the cost of the special manager’s work.”
Fentiman said the deferred suspension of the gaming licence for the Gold Coast and Brisbane may be taken off the table if The Star makes acceptable progress in its remediation work.
“Should The Star make satisfactory progress towards rectifying these issues, the special manager and I may determine to postpone or rescind the suspension of licences.”
The Queensland fine is the second $100 million hit The Star has taken this year, with the NSW Independent Casino Commission also fining the company for actions and inactions in NSW, which include major deficiencies in The Star’s anti-money-laundering program.
As a business, The Star is also currently facing federal court proceedings brought about by AUSTRAC, Australia’s financial crimes watchdog.
The Star executives and board members facing individual fines
Meanwhile, 11 leaders of The Star, who were working with the company between 2017 and 2019 – including the former CEO, CFO and current and former chairs of the board – are facing individual financial penalties for their actions and inactions during this period relating to The Star’s anti-money laundering program, not addressing money-laundering risks and misleading statements regarding how funds from China Union Pay cards were being used at The Star. Not all individuals are facing the same claims.
Members of the board in court are John O Neill (former chair), Matthias Bekier (former managing director and CEO), Kathleen Lahey (current board member), Richard Sheppard, Gerard Bradley, Sally Pitkin, Benjamin Heap (current chair) and Zlatko Todorcevski. This group is facing claims of approving the expansion of the “Star’s relationship with certain individuals with reported criminal links” instead of questioning whether those relationships should continue, and not questioning The Star’s management about critical risks when presented with information about money-laundering risks.
Along with The Star’s former company secretary and group general counsel, Paula Martin, and The Star’s former chief casino officer, Greg Hawkins, Bekier is also facing facing claims that the three executives did not “adequately” address money laundering risks associated with junket operator Suncity and its funder, and continuing this relationship “despite becoming aware of reports of criminal links” in addition to not raising money laundering issues with the board.
And Martin, alongside former CFO Harry Theodore, is facing claims from ASIC around misrepresenting what funds being withdrawn from China Union Pay debit cards onsite at The Star were being used for. ASIC alleges the pair “knowingly permitted misleading statements being provided to National Australia Bank (NAB)” which disguised that China Union Pay funds being withdrawn from NAB’s ATMs were being used for gambling, which is not permitted by China Union Pay. ASIC says over $900 million in cash was withdrawn by The Star’s customers at NAB ATMs between 2013 and 2019. Martin, Theodore and Bekier are also facing accusations that this was also not reported to the board.
“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,” said ASIC deputy chair Sarah Court.
The breach of director duties being faced by current and former members of the board carries a maximum penalty of $1,050,000 for each breach, according to the relevant section of the Corporations Act.
Within its integrated resort complexes, The Star Entertainment Group operates considerable event space.
