Former Star Entertainment Group Managing Director and CEO, Matt Bekier, has been fined AU$700,000 (US$494,000) and disqualified from managing any companies for six years by Australia’s Federal Court.
The judgement, handed down by Justice Michael Lee, comes after the court found in March that Bekier and former Chief Legal & Risk Officer Paula Martin had breached their statutory duty under the Corporations Act by failing to exercise due care and diligence in their dealings with Asian junket operator Suncity Group and regarding transactions with the National Australia Bank.
Martin has been fined AU$400,000 (US$282,000) and banned for seven years.
According to Justice Lee, the severity of the judgements against Bekier and Martin reflect not only serious corporate governance failures but also a lack of remorse, insight and contrition in relation to their actions.
His judgement states, “There remains little indication that Mr Bekier has grappled with why the conduct found against him represented a serious departure from the standards expected of a Managing Director and Chief Executive Officer of a corporation conducting a casino business.”
On Martin, he told the court, “It’s one thing to regret the consequences of having been investigated and sued. It’s another to demonstrate an appreciation of why the conduct … involves serious failures in the discharge of duties owed by senior officers of a casino operator.”
Notably, Lee said the penalties handed down to Bekier and Martin could have been higher if the Australian Securities and Investments Commission (ASIC), which brought the case, hadn’t settled for significantly less with fellow former Star executives Harry Theodore and Greg Hawkins.
ASIC first brought civil penalty proceedings against 11 Star directors and officers in 2022, however the court ruled in March that the regulator had failed to prove breaches against seven of those former directors and executives, including former Chairman John O’Neill.
The proceedings related to allegations by ASIC that Star’s board and executives failed to give sufficient focus to the risk of money laundering and criminal associations that are “inherent in the operation of a large casino with an international customer base.”
These included claims that former Star board members had approved the expansion of Star’s relationship with certain individuals with reported criminal links, rather than addressing money laundering risk by inquiring into whether Star should be dealing with them.
It was also alleged that Bekier, Martin and Hawkins breached their duties by not adequately addressing the money laundering risks that arose from dealing with Macau-based junket Suncity and its CEO Alvin Chau, and by not appropriately escalating money laundering issues to the Board.
Suncity, which shut down in December 2021 following the arrest of Chau, was known to be Star’s largest junket at the time of the breaches, with Star’s turnover from Suncity rising from around AU$2.1 billion in 2017 to AU$4 billion in 2018 and AU$5.9 billion in 2019.
Bekier has indicated his intention to appeal the verdict.
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