Star Entertainment’s ex-chief executive Matthias Bekier and former in-house lawyer Paula Martin breached their directors’ duties during the casino operator’s “Chinese money-laundering era”, the Australian Federal Court found in a judgment cited by the Australian Broadcasting Corporation (ABC).
In a decision delivered in Sydney, Justice Michael Lee found Bekier and Martin “failed” to exercise their powers and duties as directors, contravening section 180 of the Corporations Act over a 3-year period beginning in 2017, ABC News reported. The Australian Securities and Investments Commission (ASIC) brought the civil penalty proceedings in 2022 following allegations that a Chinese organized crime group was exploiting junket operations at The Star casino to launder its ill-gotten gains.
Justice Lee described a senior management culture that was “dysfunctional” and “unethical”, and said it took investigative journalism and a statutory inquiry, rather than the company’s board or management, to expose the depth of the problems, ABC News reported.
ASIC alleged in the case that Bekier had failed to terminate Star Entertainment’s contract with junket operator Suncity despite learning of potential money laundering tied to the Macau-based company, and that the former chief executive had failed to notify the company’s board of the suspicious activity, according to The Australian Financial Review. The regulator described Bekier as both “incurious” and “complacent,” the news outlet said.
Federal officials have accused the company of disguising junket-related transactions as “hotel expenses” in an effort to help Chinese gamblers circumvent restrictions on their access to cash, AFR said.
Only Bekier and Martin gave evidence at trial despite nine former executives and directors being defendants in ASIC’s case, ABC said. Justice Lee concluded that Bekier should have been aware that a Chinese junket operator had been accused of involvement in money laundering, but framed the key responsibility in Bekier’s remit as the casino’s exposure to credit risks.
The court was also critical of Martin’s reliability as a witness, ABC News reported. Justice Lee pointed to inconsistencies in her testimony under cross-examination, describing it as “under strain” and unreliable, and calling her “an unimpressive witness.”
Across the pair, the court identified seven breaches of directors’ duties, ABC News said. Each breach carries a maximum penalty of up to $1,050,000, putting Bekier and Martin at risk of combined penalties exceeding $7 million. The Federal Court is expected to set a date within the next seven days to hand down orders and penalties.
Read more at ABC News
Read more at The Australian Financial Review