Star Entertainment’s former chief executive Matt Bekier is alleged to have told the company’s board that he believed National Australia Bank and China UnionPay had “tacitly supported” funds from Chinese gamblers passing through their financial systems.

The corporate regulator, the Australian Securities and Investments Commission (ASIC), is suing Star Entertainment board members and executives, claiming that they were blind to the red flags that pointed to money laundering and illicit activities at the casino group.

It has accused the former Star board members and executives of breaching their duty to act with care and diligence.

Star’s high roller business, which attracted wealthy gamblers from overseas, and in particular China, on so-called “junkets”, was exposed for having significant problems. A number of Asian-based junket operators were shown to have criminal ties in an earlier investigation by this masthead.

In court, ASIC’s barrister Dr Ruth Higgins, SC, raised questions about what Star executives knew about the risks posed by transactions involving customers who were using China UnionPay (CUP) cards for gambling, and the timing of the disclosure of its concerns to NAB. NAB was Star’s biggest lender, banker and also had over the years supplied ATM terminals to the company.

It was revealed in an earlier hearing in the six-week trial that China UnionPay, a Chinese financial institution, had raised concerns with Star executives that fund transfers via its cards were being ploughed into gambling, and the possibility that money was being laundered. This was occurring at a time when China’s government had executed a gambling and corruption crackdown.

It was also revealed during the trial that Star executives had suggested using receipts for yachts, private jets, diamonds and golf days to mislead CUP that transferred funds were not being used for gambling in its casinos.

Higgins also argued that Star knew the disclosure of concerns about CUP transactions could potentially damage its relationship with NAB, lead to legal action, reputational damage, and pose a risk to its casino licences in Queensland and NSW.

The case, which is before Justice Michael Lee, further heard that a NAB executive, who had for a number of years managed the bank’s relationship with Star, did not know that funds transferred to CUP cards were being used for gambling.

The statement from the NAB executive and what he thought had occurred was challenged for its “relevance” by Bekier’s barrister, Jerome Entwisle.

Justice Lee noted that he had “seen a business record”, which he expected would go into evidence, where Star’s former chief executive Bekier had told the company’s board that “NAB and CUP tacitly supported what was going on with money being used for gambling”.

The hearing continues.

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