Former Star boss grilled as casino operator mulls lifeline

The Sydney Morning Herald
06 Mar

Former Star Entertainment chief executive Matt Bekier has rejected claims he may have breached his duties by relying on other executives to alert him to any probity issues ahead of the board approving the company’s financial exposure to Chinese junket operators.

On his second day before the federal court, Bekier was asked about the board’s approval of an increase in a cheque-cashing facility (CCF) in November 2017 – for Qin Sixin on behalf of the Minmin Shen junket – ostensibly without probity issues being addressed at all.

Bekier’s testimony on Thursday came amid reports that Star, which has been teetering on the brink of going into administration, may have secured a lifeline.

Former Star chief Matt Bekier walks out of the Federal Court with his legal team on Wednesday.Credit: Louie Douvis

Reports surfaced Thursday afternoon that Star’s board were close to clinching a deal with the partners in its new Brisbane casino – Chow Tai Fook Enterprises and Far East Consortium – that would give it the short-term funding needed to avoid administration this week.

The consortium partners have reportedly agreed to buy the casino for $50 million. Star did not respond to requests for comment.

Star’s financial woes were triggered by a series of investigations in The Age and The Sydney Morning Herald that revealed potential breaches of anti-money-laundering laws. The company subsequently lost its licence to run casinos in NSW and Queensland.

On Thursday the federal court heard how detailed information was offered to help Star’s board assure themselves of the junket operator’s credit worthiness, but no such information was provided on any probity issues that had the potential to threaten its licence.

“The credit risk data included in the board’s paper allowed the board properly to form its own view about the acceptability of the credit risk?” asked Dr Ruth Higgins, SC, who is acting for ASIC.

“Yes,” Bekier replied. He agreed that the board was not provided with information to form its own view about probity, but said board members had other ways of forming a view on probity.

‘I formed my own judgment on the basis of my understanding of the processes that we had established, and on that basis I was comfortable to proceed.’

Former Star Entertainment chief executive Matt Bekier

The issue of Star’s board approving increased finance for junket operators without addressing the issue of probity goes to the heart of ASIC’s case that they breached their duty to act with care and diligence.

While Star executives failed to provide the board with all the troubling information about Sun City and other junkets, ASIC told the court that, in its view, each of Star’s directors also failed to take reasonable steps to oversee its executive team.

“The board cannot avoid responsibility for Star’s failure to manage those risks,” Higgins suggested.

Higgins told the court that at the time of the board’s November 2017 CCF decision on Qin’s Minmin Shen junket, Star had submitted suspicious matter reports to AUSTRAC about Qin.

The court was told that the reports are subject to suppression orders, and no further information was revealed.

Loading

Bekier told the court that the fact these junket operators had been checked previously, and that he knew all the processes we had in place to monitor behaviour and probity of these junkets “gave me the confidence that the appropriate checks have been conducted”.

Bekier agreed that he had relied on his executive team for assessing probity risks but rejected the claim this means he did not form his own view as required by the Casino Control Act – that it risked Star’s requirement to remain a suitable person under the act.

“I formed my own judgment on the basis of my understanding of the processes that we had established, and on that basis I was comfortable to proceed,” he told the court.

The hearing continues.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Most Discussed

  1. 1
     
     
     
     
  2. 2
     
     
     
     
  3. 3
     
     
     
     
  4. 4
     
     
     
     
  5. 5
     
     
     
     
  6. 6
     
     
     
     
  7. 7
     
     
     
     
  8. 8
     
     
     
     
  9. 9
     
     
     
     
  10. 10