Earlier this week, the corporate watchdog of Australia started legal action against former and current executives and directors of The Star Entertainment. The enforcement action followed public investigations into the gambling giant’s operations in New South Wales (NSW) and Queensland.
The Australian Securities and Investment Commission (ASIC) officially revealed that it has initiated civil proceedings in Federal Court against 11 people associated with The Start Entertainment, including former CEO Matthias Bekier, former chair John O’Neill, Sally Pitkin, Gerard Bradley, Richard Sheppard, Kathleen Lahey, Zlatko Todorcevski, and Ben Heap. The country’s corporate watchdog will allege that the aforementioned board members violated their duties under Australia’s Corporations Act in the period from 2017 to 2019.
The ASIC claims that the expansion of the casino company’s relationship with individuals with reported links to criminal organisations had been approved by board members of the operator, which exposed The Star Entertainment’s business to the risk of money laundering. Apart from that, board members had allegedly not taken measures to prevent the potential for money laundering, even when they had been informed about these critical risks. The Australian Securities and Investment Commission now claims that the aforementioned lack of action constituted a violation of the directors’ duty obligations.
According to a statement issued by Sarah Court, the deputy chair of the ASIC, the company’s board members failed to focus on the risk of criminal associations and money laundering activities, which have been innately linked to the operation of a large casino servicing people from all over the world.
ASIC Urges Court to Impose Penalties and Disqualification Orders over Alleged Duty Violations
Australia’s corporate watchdog is now seeking the court to issue declarations of contraventions, to impose penalties and disqualification orders linked to people who were at the peak of the organisation.
Each of the alleged violations carries a maximum monetary penalty of $1.05 million.
The Star Entertainment, in its turn, issued a statement, saying that the court proceedings concerned matters that were subject to regulatory investigations in both NSW and Queensland. The company explained that The Star and its subsidiaries are not involved in the proceedings.
The company has been suffering an enhanced regulatory action lately. Earlier in 2022, the Sydney casino of the Australian gambling giant faced an AU$100-million fine, with the penalty being imposed by the NSW Independent Casino Commission over allegations of links to organised crime, fraud, and money laundering. Another probe, held in the state of Queensland, also found serious deficiencies in the anti-money laundering practices of the company.
The relationship between the Asian gambling junket Suncity and The Star Entertainment has attracted the attention of the ASIC’s allegations. Reportedly, Suncity accounted for a turnover of AU$5.9 billion for the Australian gambling giant back in 2019, becoming the biggest junket of the casino. As alleged by the corporate regulator of the country, the former CEO Mr Bekier, former CCO Greg Hawkins, and former company secretary and group general counsel Paula Martin failed to address the risks of money laundering that had been associated with the junket.
Furthermore, the Australian Securities and Investment Commission alleged that the aforementioned individuals breached their duties because they had decided not to escalate the money-laundering risks to the company’s board. Mr Bekier is now facing seven allegations of duty violations in total.
- Author
Olivia Cole
