Star board could have ‘pulled threads’ to reveal junket warnings, director says

A director of The Star Entertainment Group says its board should have demanded more information when executives made vague references to “concerns” raised about one of its junket tour partners after it was caught dealing with suspect cash at its Sydney casino.

Star director and former UBS Global Asset Management managing director Ben Heap told the NSW government inquiry into Star on Tuesday that the board would have closed notorious junket outfit Suncity’s private gaming room in 2018 if management had kept it properly informed.

A report to The Star’s board about junket partner Suncity did not mention CCTV capturing instances of large bags of cash being handled in its private room at its Sydney casino.

The inquiry – which was triggered by a series of reports by this masthead revealing Star’s criminal infiltration – has already led to a raft of senior executive resignations and in its final week is examining the role of Star’s directors in the ASX-listed company’s failings.

Suncity staff had been filmed handling bags stuffed with hundreds of thousands of dollars in cash in the private salon in May 2018, prompting warnings from two compliance managers it was running a “casino within a casino” and raised an “unacceptable level of risk” of money laundering.

But the inquiry heard chief executive Matt Bekier, who resigned in March, downplayed these warnings at a board meeting two months later, telling directors only that “concerns” had emerged around “certain activities” in Suncity’s room.

Heap, who joined the board that year, acknowledged directors failed to asked for more details about what the “concerns” and “activities” were.

Counsel assisting the inquiry, Caspar Conde, said the board was only “one or two questions away” from uncovering serious problems about Suncity which it could have acted on.

“As a director of a casino business you have to be on red alert for issues relating to money laundering and potential criminal influence,” Conde said. “Do you agree that when the board received a vague message like this from management, that’s something that ought to have been interrogated?”

Heap said that, “with what I know today, this is an example of where I would like to have asked more questions”.

While the board had to accept “ultimate responsibility” for not shutting down Suncity’s room sooner, Heap also said the board should not have needed to “work against management” in obtaining information it needed.

‘It’s hard to form a view other than management didn’t want this matter explored further by the board.’

The inquiry heard on Tuesday that the board failed to request a copy of a Hong Kong Jockey Club report which warned of Suncity’s criminal links after it was referred to in reports by this masthead about Star’s rival Crown Resorts in 2019.

Members of Star management had a copy of the report, and Heap said that was another “thread that could have been pulled on” to alert the board to the risks of dealing with the group.

Adam Bell, SC, who is running the inquiry, asked Heap why he thought management communicated with the board in such a “delphic” fashion.

“It’s hard to form a view other than management didn’t want this matter explored further by the board,” Heap said. “It may be that the importance of Suncity to the business, meant that there was a desire that that business not be challenged.”

The inquiry continues.

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