Bombshell claims have been made against 11 current and former directors and executives of casino operator Star Entertainment, including a former Queensland Under Treasurer Gerard Bradley, in civil penalty proceedings filed against them by the Australian Securities and Investments Commission.
The 11 directors, which also included former chair John O’Neill and the current chair Ben Heap, face allegations from ASIC of breaches of their duties of section 180 of the Corporations Act.
It follows the $100 million fine handed down by Attorney General Shannon Fentiman last week over claims of money laundering and lying to regulators. NSW has imposed a similar fine and a special manager has been brought in to oversee Star’s operations.
ASIC has alleged the board members approved the expansion of Star’s relationship with “certain individuals with criminal links”, rather than addressing the money laundering risks or asking whether Star should be dealing with them.
Allegations raised in the Bell and Gotterson inquiries found that Star encouraged underworld figures who were banned by the Sydney casino to gamble at the Gold Coast property.
“ASIC also alleges that board members, when provided with information about money laundering risks affecting Star, did not take steps to make further inquiries of management about those critical risks and that this was a breach of their director duty obligations,” ASIC said.
ASIC deputy chair Sarah Court said the commission was alleging that Star’s board and executives failed to give sufficient focus to the risk of money laundering and criminal associations which were inherent in the operation of a large casino with an international customer base.
One of the revelations from the two inquiries was how Star allowed gamblers from China to withdraw funds from their China Union Pay credit cards which was banned by CUP and China’s currency laws. It also allegedly covered this up by telling its bank that the funds were for hotel expenses.
ASIC’s allegations relate to members of the board between 2017 and 2019. That affected O’Neill and Heap as well as former managing director Matt Bekier, Kathleen Lahey, Richard Sheppard, Gerard Bradley, Sally Pitkin and Zlatko Todorcevski.
Pitkin is also chair of the Brisbane based Super Retail Group.
It also alleged Bekier and former company secretary and general counsel Paula Martin as well as chief casino operator Greg Hawkins breached their duties by not adequately addressing the money laundering risks with Asian junket company Suncity and its funder as well as continuing to deal with them despite becoming aware of their criminal links.
ASIC also alleges the three did not appropriately escalate the money laundering issues to the board.
Chief financial officer Harry Theodore and Paula Martin were also alleged to have knowingly permitted misleading statements being provided to the National Australia Bank regarding the use of the China Pay cards.
“Those statements disguised the fact that Star was permitted CUP cards to be used for gambling, which was prohibited by CUP,” ASIC said.
“ASIC is aware of over $900 million was obtained by Star customers using CUP cards in NAB ATMs from 2013 to 2019.
“ASIC also alleges that they and 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.
“They are required to bring an inquiring mind to business operations. It is not set and forget,” he said.
Star said it was not a party to the ASIC proceedings.
This story first appeared in InQld and is republished here with permission.
