Former Star CFO Harry Theodore disqualified for nine months as case settled with ASIC

Star Entertainment’s former CFO Harry Theodore has agreed to a nine-month director ban, settling ASIC’s case ahead of a major trial against his one-time colleagues.

Harry Theodore at the Independent review of the Star. Source: Supplied

ASIC has struck a settlement deal with Star Entertainment’s former chief financial officer Harry Theodore ahead of the start of a case against his fellow executives.

The Federal Court on Wednesday heard that Mr Theodore had agreed to be disqualified from running a corporation for nine months in return for ASIC settling its case against him.

Star Entertainment’s former executives including ex-chief executive Matt Bakier are preparing for a courtroom showdown with ASIC.

The court heard that Mr Theodore will admit to failing to prevent staff sending to its bank NAB on November 7, 2019, an email which contained inaccurate and misleading representations.

Federal Court judge Michael Lee agreed for Mr Theodore’s case, which will involve him agreeing to a declaration of contravention, to be heard by a separate judge.

That followed concerns raised by counsel for the other defendants that their clients could be impacted by apprehended bias by the sitting judge in the main case.

Justice Lee said his associate had been sent a joint communication from ASIC and Mr Theodore on January 31 advising they had reached agreement on a proposed resolution to ASIC’s claims against the former Star executive.

Lawyers for Mr Theodore told the Australian earlier this week that he had not agreed to give evidence against other defendants.

Justice Lee said he had initially been reluctant to grant the request for a separate judge to settle the Theodore case given the court was facing stretched resources.

“I was conscious of the fact that this will place a burden on another judge of the court at a time when the demands of the judges in the Sydney registry are such that it is unclear as to whether another judge to whom the case would be allocated would be in position to hear the matter let alone deliver judgment.,” Justice Lee said. “Having said this, at least two defendants have raised the prospect of bringing an application for apprehended bias.”

Apprehended bias will occur if a fair-minded and reasonably informed observer might consider that a judge might not approach their task with a sufficient level of impartiality.

The marathon court battle is set to kick off on February 10.

Former executives are alleged to have breached their duties by failing to address money laundering risks at Star through its links with Macau-based gambling junket operators Suncity.

They are also alleged to have misled Star’s bank NAB over the use of China Union Pay cards, which were allegedly used for gambling.

China Union Pay has allegedly told Star, via NAB, that “transactions relating to the purchase of gaming chips were not permitted, and NAB conveyed that to Star in 2016 and 2017”.

“In its responses, Star did not indicate that a large proportion of the funds was ultimately used for gambling,” ASIC claims in its court filings.

ASIC’s court documents cite a November 7 2019, note sent by Star to NAB which had been reviewed by Star’s general counsel Paula Martin and Mr Theodore, the CFO, “which conveyed that the funds were used for non-gambling expenses such as hotel accommodation, private jet travel, tourism services, food and wine and jewellery, and that none of the funds obtained were used (whether directly or ultimately) to fund the purchase of gaming chips”.

Originally published as Former Star CFO Harry Theodore disqualified for nine months as case settled with ASIC