Matt Bekier, Chief Executive Officer of Australian gaming heavyweight Star Entertainment Group, has stepped down from the role. His resignation comes amid issues raised during a public inquiry into the group.
“While the review remains ongoing, Mr. Bekier informed the Board that as Managing Director and CEO he is accountable for the effectiveness and adequacy of the company’s processes, policies, people and culture. Mr. Bekier said the right thing to do was for him to take responsibility,” the company shared in a statement.
Bekier, who has been in the position since April 2014, is to step down from the company “immediately,” and will work with the board “to transition his executive responsibilities in an orderly manner.” A final departure date is yet to be determined, with The Star set to make a further announcement when this occurs.
Allegations against the company are part of an inquiry into the company’s suitability to operate the Star Sydney, Australia’s second-largest casino. Australian financial crime watchdog AUSTRAC launched a probe in June last year into the casino.
The casino operator has been accused of a series of misconducts, including executives disregarding rules and laws to allow millions of dollars to illegally flow through the venue, including disguising as hotel expenses A$900 million ($676 million) of withdrawals on Chinese debit cards to fund gambling, reports Bloomberg.
The inquiry last week heard “damning evidence” that The Star sought to avoid regulatory scrutiny and helped high rollers bring in millions of offshore money, reports Financial Review. The company has also been accused of setting up a secret gambling room for criminal gang-linked junket operator Suncity and of hiding Suncity’s illegal cash cage from the NSW regulator.
Additionally, the review also heard that when consultants tried to warn The Star that it was not complying with anti-money-laundering laws, Bekier grew “hostile,” branding a damning KPMG report as “wrong” in 2018. Experts believe, however, Bekier may not be the only one to take the blame and that some other board members might soon follow in his footsteps and resign.
Chairman John O’Neill and other directors, who allegedly were aware of the issues, might follow Bekier’s decision should the company seek to improve its image, governance experts say. O’Neill, along with non-executive directors Gerard Bradley, Sally Pitkin, Katie Lahey and Richard Sheppard, was allegedly present at the audit committee meeting in which Bekier labeled the KPMG report as “wrong.”
“If Crown Resorts is a guide, we have a long way to go which could involve further management/board change and the now, very real possibility of Star losing its license to operate, which could conceivably dash plans for an additional 1,000 Electronic Gaming Machines in Sydney,” Jefferies analysts wrote in a note, according to Reuters.
The company has also been accused of trying to hide the damning report from AUSTRAC by incorrectly claiming it was subject to legal privilege, and of asking KPMG to review its findings in light of the CEO’s complaints, further reports The Age. The consultants, however, stood by their original findings.
A “refreshment” of the company’s board is now expected, and Star might develop a succession plan for an orderly transition into a new management structure.
