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The top lawyer, CFO and chief casino officer for Australian operator Star Entertainment Group have fallen on their swords after damaging testimony at a review into the company’s operations.
CFO Harry Theodore, chief legal and risk officer Paula Martin and chief casino officer Greg Hawkins submitted their resignations and the company accepted them, Star Entertainment said in a filing to the Australian Securities Exchange (ASX) on Friday (May 6).
The three will continue with the company to “transition their executive responsibilities in an orderly manner”, the filing said, although by Monday the company had announced temporary replacements, with chief gaming officer Christina Katsibouba named as interim CFO and chief casino officer for Queensland state Geoff Hogg assuming interim control of The Star in Sydney.
The resignations follow the exit of CEO and managing director Matt Bekier in March over systemic compliance failures raised in the ongoing review ordered by New South Wales (NSW) state’s Independent Liquor & Gaming Authority (ILGA).
Each of Theodore, Martin and Hawkins struggled with their testimony at times, with counsel assisting the review Naomi Sharp questioning the honesty of their statements on several occasions, all but making their positions at Star untenable.
Martin spent much of her time under questioning in a degree of apparent emotional distress, under repeated suggestions she was not being truthful.
Sharp also directly accused Hawkins and an unrepentant Theodore of not being truthful in recounting matters relating to cash card company China UnionPay, whose customer accounts were used for gambling but misrepresented as hotel expenses, in violation of an agreement with UnionPay and Star’s bank NAB.
Star Entertainment also announced on Monday that it has suspended all domestic and international rebate play programs for all of its casinos until further notice, following executive admissions of rebate program abuses to the review.
“The Star will work with gaming regulators to address various identified risks as part of ongoing reviews of systems and processes,” it said, adding that it was using external advisors to “improve those systems and processes while cooperating fully with the review”.
The filing also said the company “reconfirms a commitment to not dealing with junkets while it addresses issues arising” from the review, likely in response to Sharp’s question on whether the company was honouring that commitment.
The player rebate programs have come under sustained scrutiny in the review, and are confirmed to have been used by Star to avoid paying tax to the NSW government through falsely categorising local players as coming from interstate.
Bekier’s post-resignation testimony to the review last week started in conciliatory fashion, agreeing with Sharp that the company had failed its compliance responsibilities and that several of his staff were responsible.
However, Bekier became increasingly defensive as Sharp moved to hold him directly rather than symbolically accountable for Star’s UnionPay debacle and exposure to massive money laundering risk.
This week the review has commenced grilling Star Entertainment’s board, with non-executive director Richard Sheppard telling the review that the conduct of the executive team was “incredibly disappointing and very surprising … that nobody put their hand up” to identify compliance failures.
There were a “few mistakes with appointments in retrospect”, and it was a mistake to combine chief legal officer and chief risk officer in the same role, Sheppard said.
However, Sharp and Adam Bell, who is leading the review, pressed Sheppard on why the board did not exercise sufficient oversight over an extended period, eliciting another round of curt, defensive responses from the finance veteran and former Macquarie Bank CEO.
