Star Entertainment’s directors and management remained strangely ignorant of the existential threat to their business in 2019 from dubious junket operators, even as The Sydney Morning Herald and The Age reported bombshell allegations of criminal activity at rival Crown Resorts, the Federal Court heard on Wednesday.
The reports alleged that Crown casino’s licensed junket operators had links to organised crime, drug and sex trafficking, and money laundering. Alvin Chau’s Suncity was among the junket operators named.
Star Entertainment’s former board were remarkably incurious about the implications of the bombshell media reports on Crown Resorts. Credit: Louie Douvis
Dr Ruth Higgins, SC, who is acting for the Australian Securities and Investments Commission (ASIC), told the court that an email from Star’s then-chair John O’Neill to his fellow board members in response to the Crown reports shows there was at least some awareness that junket operators, including Suncity, were “causing extremely adverse, reputational, legal consequences” for Crown.
But Higgins said a “species of cognitive dissonance seems to be at work” in the board paper, which criticised Crown’s junket failures without querying whether Star should cease its relationship with these same parties linked to organised crime and alleged money laundering.
“Those omissions from the Crown allegations board paper are particularly strange and particularly glaring” given that the issue of Star’s continuing relationship with Chau and Suncity had been the subject of a newspaper article, Higgins said.
She also told the court of the “extreme peculiarity” that the board paper failed to even mention Suncity or Chau. The board was already aware of a request for information from the NSW gaming regulator concerning Star’s relationship with both of them.
The court was also provided with a Herald article from August 2019 in which Star’s then-chief-executive Matt Bekier defended his company’s relationship with Suncity.
“Suncity is the largest junket operator in the world … and we work in a very prescribed and lawful way with junkets that are credible and have been improved, in some states, by the regulators,” he said.
Higgins told the court that the amount of information available to Bekier and other executives at the time, which should have triggered probity concerns about Suncity, was “genuinely overwhelming”.
