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The CEO and managing director of Australian casino operator Star Entertainment Group has submitted his resignation over company compliance failures exposed during an ongoing New South Wales (NSW) state government regulatory review.
The Independent Liquor & Gaming Authority's (ILGA) review of Star Entertainment’s compliance record has gone from bad to much worse for the company, with Bekier’s departure putting enormous pressure on the board and top managers.
Matt Bekier told the Star Entertainment board that “the right thing to do was for him to take responsibility” for numerous apparent breaches of anti-money laundering laws, according to a company filing to the Australian Securities Exchange on Monday (March 28).
The decision to resign “follows issues raised in the public hearings in connection with the review of The Star Sydney”, now entering their third week.
“While the review remains ongoing, Mr Bekier informed the board that as managing director and CEO he is accountable for the effectiveness and adequacy of the company’s processes, policies, people and culture,” the filing said.
Bekier has stepped down from the board and an announcement is forthcoming on when he will step down as CEO and managing director, it said.
Bekier’s resignation potentially weakens the defences of numerous other board members and executive officers, the most senior of whom have yet to give evidence.
The review has heard from lower-ranked company officials that CFO Harry Theodore and general counsel (corporate) Oliver White were aware of a strategy to mask as much as A$900m ($670m) in gambling funds as hotel transactions.
This strategy resulted in the deception of cash card operator China UnionPay, which does not allow gambling transactions, and the National Australia Bank (NAB).
NSW Treasurer Matt Kean said on Sunday that the government will hold Star Entertainment accountable for “any improper classification of spending by clients … including any impacts on gambling tax revenue payable to the NSW government”.
“Make no mistake,” he said. “We will chase every dollar that is owed to the taxpayers of NSW if any misconduct has occurred.”
Other testimony has alleged the company encouraged Chinese VIP customers to use UnionPay for gaming transactions despite associated restrictions in NSW. One customer, billionaire businessman Phillip Dong Fang Lee, transferred A$11m to the casino via UnionPay in one day.
The inquiry also heard that Macau junket Suncity’s former operations at The Star Sydney may have breached anti-money laundering laws and that Bekier rehired KPMG auditors to dilute their own damning assessment of the company’s money laundering protocols.
The state review, conducted by external senior counsel Adam Bell on behalf of the ILGA, has the powers of a Royal Commission and can compel testimony from witnesses.
The review has adopted the methodology of the NSW Bergin Inquiry into Crown Resorts, gathering sworn testimony from lower ranking witnesses before presenting top executives and board members with overwhelming documentary and witness evidence of misconduct.
That review resulted in the resignations of almost all of Crown's board members and key executives and triggered damning Royal Commission probes in Victoria and Western Australia that have heavily constrained Crown operations.
This week’s witnesses include Star Entertainment regulatory, commercial and investigative staff at a managerial level, before proceeding to Oliver White, group general counsel Andrew Power and company secretary and chief legal and risk officer Paula Martin next week.
