Star case judge calls for ‘co-operation’ from defendants

Only former chief executive Matt Bekier is now likely to take the stand as ASIC wraps up its case against him and other former Star executives.

Justice Michael Lee

The Federal Court judge hearing the corporate cop’s case against former Star Entertainment executives and directors has expressed frustration at not being informed which defendants will be called to give evidence by their lawyers.

Federal Court judge Michael Lee on Wednesday asked counsel to name the defendants who would be called to the witness stand.

ASIC is seeking fines and periods of disqualification for the defendants for breach of money laundering controls and fiduciary duties. Only former chief executive Matt Bekier is now likely to take the stand, meaning the defence case may come down to the production of written evidence.

“You’ve only thought about this for two years and you can’t do better than that?”asked Justice Lee, referring to the fact the proceeding was started two years ago.

“I’m trying to work out when I have to sit and who’s going to be called. I do expect some co-­operation.

“If there’s a real forensic reason for not telling me, fine. I don’t know what it would be at this stage, but you can’t tell me who you’re going to call?

“I’d just like to get an idea as to the likely scope of the evidentiary case. Let’s leave aside, for one moment, documentary tenders, but what witnesses are anticipated at present to be called?”

While the case is likely to be heavily dependent on written evidence and submissions, Justice Lee said he found “oral submissions far more useful when I’ve had the opportunity of absorbing the written submissions, because then I can work out what I really need assistance in relation to, rather than just having all this information flow over me.”

ASIC has already struck a settlement deal with Star Entertainment’s former chief financial officer Harry Theodore and casino chief Greg Hawkins, with their case to be heard by a separate judge next week.

Justice Michael Lee

The remaining defendants include Mr Bekier, company secretary Paula Martin, former chairs John O’Neill and Benjamin Heap as well as former high-profile directors Sally-Anne Pitkin, Kathleen Lahey, Gerard Bradley, Wallace Sheppard and Zlatko Todorcevski.

Michael Henry SC for Star’s non-executive directors said whether his clients were called was “subject to whether or not someone else, essentially Mr Bekier, Ms Martin or Mr O’Neill, or a person called by any of them, was to get into the witness box and say something that makes us reconsider that position,” he said.

“But as things currently stand, we don’t propose to call anyone.”

ASIC’s legal team including chief counsel Dr Ruth Higgins have now wrapped up their submissions that the defendants breached the Corporations Act by failing to discharge their duties with a reasonable degree of care and diligence.

Dr Higgins has alleged that executives were “incurious and complacent” about alleged criminal activity and money laundering involving junket operators at the company’s casinos, including bags of $50 notes delivered secretly to a private gaming salon.

In one incident in 2017 the Star board approved increasing a credit facility for junket operator Qin Sixin by more than $20m despite his arrest five years earlier in China and Macau for involvement in alleged money laundering and illegal banking.

She also alleged the company had information about Suncity founder Alvin Chau alleged links to triad gangs and organised crime figures before the board signed off to increase Suncity’s credit cashing facilities (CCF) from $50m to $80m. At the time, vast sums of Chinese money was coming into Australia, accompanied in turn by a recognised risk of affiliations to Chinese organised crime, including triad gangs.

The court also heard Star Entertainment executives suggested using receipts for private jets, yachts and diamonds to show funds were not being transferred from China to its casinos for prohibited gambling purposes.

Justice Angus Stewart will preside in the case against Mr Theodore and Mr Hawkins on Monday, February 24, in a combined hearing after ASIC settled the case against the former Star executives. Mr Theodore has agreed to be disqualified from running a corporation for nine months and fined $60,000. Mr Hawkins has agreed to be fined $180,000 and accept an 18-month disqualification from managing corporations as part of the deal. Mr Hawkins is now acting chief operating officer at Bloomberry Resorts in The Philippines.

The main case has been adjourned to March 5.

Former Star Entertainment Group CEO Matt Bekier

Originally published as Star case judge calls for ‘co-operation’ from defendants