Former Star Entertainment boss Matt Bekier tells inquiry he felt ‘let down’ by casino’s executives

Former Star Entertainment chief executive Matt Bekier has called for a ‘full revamp’ of the company’s high-roller arm.

Star has a ‘very good culture’ and has ‘evolved into a modern company, but the VIP business is stuck in the past, former CEO Matt Bekier claims.

Former Star Entertainment chief executive Matt Bekier has called for a “full revamp” of the company’s high-roller arm, branding it a “dark art”, and says if the board had known the scale of the wrongdoing inside the division it would have “shut it down”.

Mr Bekier – who resigned in late March after eight years at the helm – told a royal commission-style inquiry into Star that he felt “let down” by a range of executives, including chief legal and risk officer Paula Martin, chief ­casino officer Greg Hawkins and general counsel Oliver White.

And he said the executive he was closest to, chief financial officer Harry Theodore, showed ­“really bad judgment”.

Mr Theodore admitted to the inquiry on Monday morning that he engaged in unethical and deceptive behaviour – ultimately misleading the People’s Bank of China – over Star’s “sham” practice of disguising almost $1bn in gambling transactions on Chinese debit cards as hotel charges.

Mr Bekier said he did not believe the board knew of the problems that plagued Star’s VIP business, which included continuing to deal with Chinese junket operators who had links to triad criminal gangs and repeatedly flouted anti-money-laundering laws at the exclusive gaming salon at Star’s Sydney ­casino. Mr Bekier and Star chairman John O’Neill – who has ­assumed chief executive duties – had previously praised Star’s anti-money-laundering practices and distanced the company from the organised crime that had infiltrated rival Crown Resorts.

But on Monday afternoon, Mr Bekier took aim at Mr Hawkins and other executives, particularly over Chinese junket Suncity ­repeatedly breaching anti-money-laundering laws inside an exclusive gaming room known as Salon 95 at Star’s Sydney casino.

“I’m disappointed in Salon 95. (Mr Hawkins) raised the risk with me on that; I thought the issues have been resolved. And I represented to the board and outside investors that the things that we learned about Crown would never happen,” he said.

“If the board of directors had known any of these things, they would have supported me in shutting down that business a long time ago.

“There needs to be a full revamp and reorganisation of that business under fresh leadership.” But Mr Bekier stopped short of saying that Star’s VIP management was “rotten to the core”, as suggested by counsel assisting Naomi Sharp. He said that, broadly, Star had a “very good culture” and had “evolved into a modern company”, but the VIP business was stuck in the past and he branded it a “dark art”.

He said: “What has served us well everywhere else is to bring outsiders into the organisation that looked at things we were doing with fresh eyes.

“We have not done that in that part of the business. We’ve relied on people with a lot of experience to do what they do … because it seemed like a bit of a dark art, we didn’t challenge them.”

Mr Bekier resigned in March – 10 days after the inquiry began.

The Star Casino and Hotel in Sydney.

The inquiry heard that Mr Bekier had slammed an independent KPMG report into Star, which exposed “fundamental deficiencies” in the group’s anti-money laundering program, at a hostile meeting in May 2018.

“I had a series of conversations starting on the Saturday and then on the Sunday where I was playing back my increasingly strong conviction that I should resign,” he said. “It was a difficult decision for me. I’m very proud of what we had achieved and I had come to understand through this review and some of my own inquiry inquiries … that was what I perceive to be a subculture around the VIP business … that (they) behave ­differently from the rest of the ­organisation.

“And I felt that it was best for the company to signal that, to take accountability for things that weren’t good, and the CEO is responsible and accountable for all parts of the company.”

Mr Bekier conceded that Star had misled NAB in disguising $1bn worth of gambling transactions on China Union Pay cards as hotel charges, and said it was a “sharp” practice.

Mr Bekier said Mr Theodore, who reviewed responses to NAB with Ms Martin and Mr White, showed “really bad judgment”.

On Friday, Mr Theodore said he was “considering” his position at The Star.

Sources with direct knowledge of discussions told The Weekend Australian last month his resignation plans had been communicated ­internally.

Mr Theodore has been CFO since 2019, but has held other senior positions at the company since arriving almost 11 years ago from the Royal Bank of Scotland.

“I have learned about communication to the bank, to the banks, that were fundamentally misleading,” Mr Bekier said. “Because everybody else was doing it, even though we probably knew that it was a very sharp practice.”

NAB probed Star on behalf of China Union Pay in 2019 after China’s central bank observed some individuals had swiped up to $20m in one stint at Star’s Sydney casino. Gambling is illegal in China and CUP cards cannot be used for that purpose.

Mr Theodore maintained that NAB knew about the true nature of the transactions – and therefore could not have been misled – citing discussions with the bank in 2016, and even directed Star’s responses about the cards. He conceded he did not know for certain that China Union Pay knew that the cards were being used to fund gambling at The Star.

Inquiry head Adam Bell SC asked if the responses to NAB translated to a failure of leadership on Mr Theodore’s part.

Mr Theodore agreed.

“(The response) was rushed. It was poorly considered. And I think that just contributed to a bad result in terms of what was sent … We should have ceased the service at this point,” he said.

But counsel assisting the inquiry Naomi Sharp SC asked how the response to NAB have been “poorly considered” when Mr Theodore reviewed it with Ms Martin and Mr White. “And it was not a one-off instance of misconduct but rather a systemic attempt to mislead over a pattern of many months,” Ms Sharp said.

Mr Theodore denied it was a systemic practice. He maintained there was a “tacit acceptance” from China Union Pay that the cards could be used for gambling. Ms Sharp said that was “a load of rubbish”. “No, Ms Sharp, what I had observed in various international markets (was) it was well known that the cards are used in this way,” Mr Theodore said.

Ms Sharp accused him of having a “lack of judgment that continues to this day”. Mr Bell said his conduct was not appropriate of a “close associate” of the licensee.

The inquiry continues.