By Amelia McGuire and Colin Kruger
Star Entertainment Group chairman David Foster has stepped down, the latest scalp to be claimed by the second inquiry into the culture of the struggling casino business.
Foster, who had been acting as executive chair following the departure of former chief executive Robbie Cooke last month, has been replaced as chair by director Anne Ward.
David Foster was removed as chairman of Star over the weekend.
Speaking at the Bell inquiry into the casino group’s culture on Monday, Ward said while it was possible for the casino business to operate independently within the next six months, it needed the right leaders.
“I believe that with the right leadership team, The Star can be transformed. Possibly within six months,” she said.
She said last week she was the only board director who voted to remove Cooke in December after the head of the state regulator, Philip Crawford, confirmed he had lost confidence in him last December. Ward was formerly a director of Crown Resorts and is the current chair of ASX-listed Redbubble and software company Symbio.
Deborah Page, another board member of The Star, told the inquiry on Monday she believed Cooke should have remained in his position in December because of the many different issues the company was negotiating at the time including the litigation with Multiplex, multiple senior appointments, and looming half-yearly results.
“I believed it wasn’t a question of if we needed a new CEO but when. It’s what I call the director’s dilemma because it comes down to the how... So on balance, at that point in time...and what I knew were significant challenges facing the company, it was not the right time,” Page told the inquiry.
Foster in his evidence to the inquiry last week said The Star never had a realistic chance of operating without some form of supervision.
Foster is the tenth senior executive to leave the company since December including Cooke, chief financial officer Christina Katsibouba, former head of legal Betty Ivanoff and former Gold Coast chief Jessica Mellor. He was appointed chairman in March last year and was perceived by the group’s battered investors to be a safe pair of hands to steer it back to suitability.
Two weeks ago, the inquiry heard Foster had referred to preparing to meet the regulator as “prepping for war” in texts with former boss Cooke and that he had also suggested getting legal advice on an idea to launch a class action against the company’s special manager Nick Weeks and the NSW Independent Casino Commission.
Foster will remain on the board of The Star until a replacement chief executive is found.
On Friday, Adam Bell, SC, will deliberate on the three weeks of hearings and other evidence to determine whether The Star is suitable to operate in NSW without supervision.
After the departure of The Star’s chair, chief executive, chief financial officer, Gold Coast casino chief and an array of other senior leaders in its casino, transformation and culture divisions, investors are bracing for it to be stripped of its licence for the second time in two years.
Director Anne Ward has replaced David Foster as chairman at The Star.
Ward agreed on Monday with Bell’s assessment that the damning communications between Cooke and Foster early this year, in their roles as CEO and chairman of the Star, indicated that the most senior levels of leadership at that time were not acting co-operatively and transparently with the regulator.
She said the leadership team had improved since July and that The Star’s board would prioritise the repair of the relationship with Weeks and the casino commission.
“I regard the repair of that relationship as an absolute priority of mine as chairman and of the [executive leadership team] ... and I will do what is necessary to restore and repair that relationship.”
Ward also nominated the recruitment of a CEO as a key priority.
“As chairman, I will become directly involved in the recruitment activities and ensure that they proceed as swiftly as is possible, and as sensible,” she said.”
Ward was more circumspect about the future profitability of The Star as it emerges from a period of intense regulatory intervention.
When asked if The Star could return to its historical profit levels, she referred to the implementation of regulations such as cashless carded play as an issue. She said the “financial impact of all of these things is not clear”.
“The revenue mix and the profit mix may change,” she said.
The Star’s rival, Crown Resorts, confirmed on Monday it would make 1000 people redundant in a restructure aimed at rebalancing its casino business following a sustained lag of foot traffic and the cost of remediation in its Sydney, Melbourne and Perth casinos.
Crown Melbourne, the casino in its portfolio most similar to The Star, transitioned all of its poker machines to mandate-carded play last year at great expense to the Blackstone-owned business, which has so far spent about $200 million on remediation.
The Star is supposed to complete this process by August.
The Star’s share price rebounded 6 per cent to 42c on Monday but has lost 25 per cent of its former value since the second inquiry started this month.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.