Australian gaming heavyweight Star Entertainment Group has appointed chairman John O’Neill as interim executive chairman of the company, effective immediately. The announcement follows Matt Bekier’s resignation from the role last Monday amid issues raised during a public inquiry into the group.
O’Neill’s appointment is set to be temporary: executive search firm Spencer Stuart has already commenced the search for a new Managing Director and CEO to permanently replace Bekier, who will be available in the short term “to provide handover assistance as the Board requests.” The new interim CEO will lead the company until a new appointment is confirmed.
The company’s Board has resolved that O’Neill will be paid additional remuneration of A$1.5 million per year ($1.1 million) while he performs the Executive Chairman role. This will bring his total remuneration to A$2 million ($1.5 million) per year while in that role.
Additionally, the company confirmed the Board will also embark on a program of renewal “in a timely manner.” Earlier this year, The Star appointed Michael Issenberg as a Non-Executive Director on February 17, subject to regulatory approvals. “Further announcement will be made in due course,” a press release explains.
Former The Star CEO Matt Bekier
This confirmation of a Board renewal comes as no surprise. After the announcement of Bekier’s resignation from his role, media and analysts began speculating other key executives would soon be following his lead, in an effort to improve the company’s image
“While the Board considers it critical that the company has stability in this transitional period to a new Managing Director and CEO, it acknowledges the need for accelerated Board change,” The Star said in a ASX announcement.
Bekier’s decision came amid issues raised during an ongoing public inquiry into the group and its suitability to operate the Star Sydney casino, the country’s second-largest. 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, such as disguising as hotel expenses A$900 million ($676 million) of withdrawals on Chinese debit cards to fund gambling, reports Bloomberg.
The inquiry 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 AML laws, Bekier grew “hostile,” branding a damning KPMG report as “wrong” in 2018. Other important board members -including O’Neill- were allegedly aware of the issues, which is why experts believe the company is now advancing its renewal process.
O’Neill, a former Australian Rugby Union and Football Federation of Australia boss, has been a Star board member since 2011 and its chairman since 2012, reports Sydney Morning Herald. Vas Kolesnikoff, executive director of advisory firm ISS, said that while O’Neill is a logical choice as interim CEO, he would also need to exit the company after overseeing its shortcomings as chairman.
“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 last month, 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.
