Star Entertainment Suspends VIP Program As Former Director Blames Board
Summary
- Star Entertainment continues to take heat for compliance failures
- Ex-director admits to approving ASX Statement
- Star Revokes VIP Rebate Schemes
Confessing to a New South Wales (NSW) inquiry into Star Entertainment Group, former director Richard Sheppard admitted that the company’s board of directors’ blind trust in the management resulted in multiple compliance failures.
Sheppard also confessed to carelessly approving a stock exchange announcement that trashed media claims of several probity issues in Star’s casinos instead of acknowledging them.
Sheppard Admits to Approving ASX Statement
Sheppard was interrogated by assisting counsel Naomi Sharp, SC, about the accurate aspects of the reports. The allegations included Star allowing shady businessman John Khoury to play at its outlets in Queensland (QLD). Khoury was banned by the NSW police from playing at Star Sydney given his links with crime rackets. Sheppard approved the company’s statement on October 11, 2021.
Sharp asked Sheppard if he would have considered it wise for the company to tell the investors that some allegations were correct, to which Sheppard replied in the affirmative. However, he denied that the company’s stock exchange statement was misleading. Though he was apprehensive about the 2018 KPMG report that exposed Star’s hidden anti-money laundering failures, Sheppard was unaware that Star did not submit a copy of the document to the financial crimes watchdog, AUSTRAC, despite multiple requests from the latter.
The former director acknowledged the management’s irresponsibility in not notifying the board about significant business risks and numerous suspicious transactions, such as disguising $900 million of gambling transactions as hotel expenses on UnionPay cards, underpaying staff and a NSW tax of $2.5 million, and providing a private salon to the notorious criminal junket group Suncity. He blamed Star’s board of directors, led by chairman John O’Neill for the crisis.
The inquiry’s revelations led to a spate of resignations at Star, beginning with CEO Matt Bekier in March 2022. Recently, CFO Harry Theodore, chief legal and risk officer Paula Martin, and chief NSW casino officer Greg Hawkins resigned after their involvement in the fallacious UnionPay scheme was exposed.
Star Revokes VIP Rebate Schemes
On 9 May, Star announced the suspension of all its domestic and international VIP rebate programs until it addresses the issues investigated by the ongoing NSW inquiry led by Adam Bell, SC. The company has assured that it will cooperate with the regulators to address identified risks and engage with external advisors to improve its systems and procedures.
After the resignation of its three senior executives, Star is looking for replacements to fill the vacant posts. Geoff Hogg was appointed as the interim Chief Casino Officer NSW, and QLD and Christina Katsibouba filled in as the CFO.
David WalkerAuthor
David is our resident 'down under' contributor, letting us know what is going on in the southern hemisphere, he is also keen blackjack player
