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John O’Neill will act as CEO following Matt Bekier’s resignation.Credit:Getty Images

The NSW inquiry into The Star Sydney,triggered by reports in this masthead,has heard how Mr Bekier tried to challenge an audit warning it was failing to tackle money laundering,while the casino ignored warnings it was working with “junket” partners linked to organised crime andenabled $900 million of fraudulent transactions on Chinese bank cards.

Mr O’Neill,a former Australian Rugby Union and Football Federation Australia boss has been a Star board member since 2011 and its chairman since 2012.

Vas Kolesnikoff,executive director of influential shareholder advisory firm ISS,said that while Mr O’Neill might make a logical choice to run the company in the short-term,he would also need to exit the company after overseeing its shortcomings as chairman since 2012.

“You know in casinos all the potential money laundering and crime issues. If you don’t put in procedures for that in 10 years as chairman of the board,then you’ve got be accountable for it,” he said.

Mr Kolesnikoff said that The Star was past the point of needing to “accelerate” board renewal and needed changes now,with all directors and executives needing to account for their role in the group’s failings.

“We saw how it all panned out at Crown,and pretty much everybody left - board and management,” he said. “There are a lot of similarities here.”

Crown suffered a near complete overhaul of its board and management team after three public inquiries uncovered shocking governance failures and ruled it was unfit to hold the licences to run its casinos in Melbourne,Sydney and Perth.

Louise Davidson,CEO of the Australian Council of Superannuation Investors,which advises super funds on governance issues,said the significant failings at Crown and now The Star showed there were cultural issues across the casino sector.“Investors will be looking to understand how the board has responded to the issues raised in the public hearings and what controls were in place to mitigate risks to relevant stakeholders,” Ms Davidson said. “Money laundering is an issue well known to the sector,and management of these issues is fundamental to the proper governance of a casino operator.”

The inquiry has heard how Mr Bekier tried to reject an independent audit that warned The Star was failing to address money laundering risks at its casinos. Mr O’Neill also objected to the KPMG report’s strong language in a May 2018 meeting,according to the hearings.

Mr Bekier would be “available in the short term to provide handover assistance as the board requests”,the company said. The Star also said that it “acknowledges the need for accelerated board change” and would make new director appointments in due course.

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