ASIC drags Star Casino execs to court seeking millions in fines

Sydney, Australia - June 20, 2014: The Star, a casino and entertainment complex in Pyrmont, is illuminated at dusk.

Star Entertainment’s c-suiters are facing fines of over $1 million each following legal action launched by Australia’s corporate watchdog.

The Australian Securities and Investment Commission (ASIC) has kicked-off civil penalty proceedings in the Federal Court against 11 current and former directors and executives of the casino giant for alleged breaches of their duties under section 180 of the Corporations Act.

ASIC’s deputy chair Sarah Court said it will allege that the Star’s board and executives failed to give sufficient focus to the risk of money laundering and criminal associations, which she said are inherent in the operation of a large casino with an international customer base.

The case involves claims against members of the Star board between 2017 to 2019, including 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.

ASIC alleges the board members approved the expansion of Star’s relationship to individuals with “reported criminal links”, rather than addressing money laundering risks alongside claims that board members ignored information about money laundering risks, breaching their director obligations.

Court told ABC News that the case was launched to uncover who should be held accountable for these alleged governance failures.

“Individuals that have engaged, if ASIC’s case is made out … in conduct of this kind should not be appropriately able to act as directors for other companies.”

In a statement, The Star’s chairman Ben Heap said that he and Lahey, who is a current director, intend to contest ASIC’s allegations, but said the two would step down once the casino giant’s “transitional period” concludes.

“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,” Heap said.

The watchdog took particular aim at Bekier, and Star executives Paula Martin and Greg Hawkins, alleging they failed to address risks arising from dealing with Asian gambling junket Suncity and its founder.

ASIC claims the three continued to deal with Suncity despite becoming aware of “reports of criminal links”, and failed to escalate money laundering issues to the board.

Martin and Theodore are also facing allegations from ASIC that 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 allegedly disguised the fact that Star was permitting CUP cards to be used for gambling, which was prohibited by CUP.

The watchdog said it was aware over $900 million was obtained by Star customers using CUP cards in NAB ATMs from 2013 to 2019.

Each of ASIC’s alleged breaches carries a maximum penalty of $1.05 million, as per ABC News. 

The news came as the Star announced its Brisbane and Gold Coast casinos would be allowed to stay open, under the supervision of special manager, Nicholas Weeks.

The Star will also be hit with a record $100 million fine as part of the Queensland government’s disciplinary action against the company following investigations in the state by Robert Gotterson and the Bell Review’s findings in NSW.

Weeks was appointed as special manager of the Star’s Sydney casino in October.

The Star is also facing fines that could amount to billions of dollars after Australia’s anti-money laundering regulator AUSTRAC commenced civil penalty proceedings in the Federal Court earlier this month.

Image: The Star Sydeny (iStock/Kokkai Ng)

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