Star director Sally Pitkin to quit, says all directors will go

All Star Entertainment directors are set to resign, with Sally Pitkin saying there is “a recognition that a new board needs to lead the company”.

Star director Sally Pitkin says she will resign from the board before the end of the financial year.

Sally Pitkin says she will resign from Star’s board by the end of the financial year, becoming the second director to publicly flag their intention to leave - with more set to follow - in the wake of damning revelations at a royal commission-style inquiry.

And another director — Katie Lahey, who has been on Star’s board since 2013 — says she will also step down as soon as “new directors become available”.

It comes after Gerard Bradley, who is also chairman of Queensland Treasury Corporation, told the inquiry on Thursday that he would step down after nine years on Star’s board, sparking a mass clean out.

Dr Pitkin told the inquiry — headed by Adam Bell SC to determine Star’s fitness to hold a NSW casino licence — that there is “a recognition that a new board needs to lead the company through the reform process into the future”.

“There is a shared understanding of that at board level and I offered to my colleagues to be the first director to step down from the board. I anticipate that will happen by the end of the financial year and then other directors will leave when it’s appropriate for the company,” Dr Pitkin said.

“The board in the meantime has to be governing and overseeing the company in the best way it can. There are personnel changes and things that can’t happen as quickly as they would in a non-regulated entity.”

Already, most of Star’s senior management team have left the company, including chief executive Matt Bekier, chief financial officer Harry Theodore, chief legal and risk officer Paula Martin and NSW chief casino officer Greg Hawkins.

Dr Pitkin - who is also chair of Super Retail Group - said more staff are set to leave.

“The board has brought in some independent external people and put them into the organisation to oversee critical areas to manage risk. There is a program of work underway in terms of identifying these people have given evidence before this review and their employment arrangements.

“The board has started with the most senior people first and it's working its way down the list.”

Asked what went wrong at Star, Dr Pitkin said the “competitive threat” of Crown Resorts entering Sydney meant the VIP team’s “voice was the loudest”. “And so the second line, the people in compliance, and people who occasionally get pushback, were either silent, ignored or they were complicit”.

“Senior leadership had for a long time carried the notion that Star was not like Crown. Crown was the company that benefited from the Packer influence and that Crown had advantages and that Star was the underdog.

“Crown could do things using influence but Star had to do it the hard way, and the things that happened at Crown could never happen at Star and I think that was blinding.”

The director and executive departures come as the inquiry heard Star disguised almost $1bn in suspicious gambling transactions on Chinese debit cards as hotel charges – misleading NAB, China Union Pay and ultimately the bank of China – during a seven-year period, and senior management “hid” material compliance breaches from directors.

The company also continued to deal with patrons with links to Chinese criminal gangs, potentially underpaid NSW gambling taxes, sent fake documentation to Chinese banks and repeatedly rebuffed requests from Austrac for a copy of a damning report from KPMG into Star’s anti-money laundering program.

Katie Lahey, another director, told the inquiry that the board had engaged a search company to find new board members, and she will be part of the “renewal process”.

“The shortcomings, and you‘ve identified them so clearly ,that as a board of directors we’ve already we’re not waiting for the result of the report to come down. we’re starting to do work on it already. And I think one of the biggest things we’ve got to invest is our relationship with the regulators,” Ms Lahey said.

“We’ve had a them and us relationship with the regulators. We need to have a positive relationship with our regulators. Our objectives and their objectives are the same. We should be able to work together to address the problem that this review identified for us.”

Asked how Star’s culture failed, Ms Lahey, who is chair of Star’s people culture and social responsibility committee, accused executives of a “group think”.

“There was a degree of complacency. A lot of our senior managers have worked together for 15, 16, 17 years. Perhaps there was a group think,” Ms Lahey said.

“That is quite common when teams of people work together ... and there is nobody in that group challenging the views ‘that is not appropriate’, ‘it’s illegal’, ‘the board should know’. There is nobody questioning that.

“Perhaps some people have been promoted beyond their level of competency”.