Australian Securities and Investments
ASIC launches civil proceedings against Star Entertainment’s 11 casino executives and directors
The Australian Securities and Investments Commission (ASIC) has launched civil proceedings against 11 casino executives and directors of Star Entertainment Group. The regulator alleges that the individuals failed to properly exercise their duties as company directors, resulting in the company’s failure to comply with financial reporting obligations. ASIC also alleges that the individuals failed to ensure that Star Entertainment had adequate systems of risk management and internal control in place. The proceedings are being heard by the Federal Court of Australia. If found guilty, the individuals could face hefty fines and disqualification from managing corporations. This case is a reminder for all directors to ensure they are aware of their responsibilities under the law and take steps to mitigate risks associated with their roles.
Breach allegations:
The Australian Securities and Investments Commission (ASIC) has today commenced legal proceedings in the Federal Court against former Chairman of Star Entertainment Group, John O’Neill and its former Chief Executive Officer, Matthias Bekier. ASIC alleges that Mr O’Neill and Mr Bekier breached their duties under the Corporations Act between 2017 and 2019. The allegations relate to the approval by the Board of Directors of the Company of a series of related party transactions with Mr Packer and Crown Resorts. The allegations are that Mr O’Neill and Mr Bekier failed to exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they were a director of a company whose affairs are in the same state as the affairs of the Company at the relevant time.
Failure to prevent critical risks
In the absence of laws and regulations, senior management at public listed companies are often reluctant to make important decisions as they believe that most of the work has been done by the Board of Directors. This is a common misconception as the directors are no more than advisors and should not take decisions on their own. Directors are expected to bring in proposals that are based on well-researched information and need to have a thorough understanding of the legal and regulatory implications. This is what is commonly referred to as ‘director’s discretion’. The directors must therefore always be seen as a check and balance on the company’s actions. They are expected to ensure that the company follows all relevant laws and regulations. In particular, if there are any irregularities or risks present with any of its dealings or businesses, it is their duty to immediately report the issues or risk to ASIC or other relevant bodies.
Companies can be prosecuted under Section 245 of the Corporations Act 2001 for not taking proper steps to prevent such risks. Towards this end, the directors have adopted a number of policies and procedures in order to protect the company from potential problems. One such example is the company’s risk management policy which outlines what risks could arise within the company and what steps should be taken in dealing with such risks. A company’s risk management policy should include as many details regarding potential risks as possible. The policy should clearly indicate how a particular risk may manifest itself and how it should be managed. The policy should also explain how the board will deal with these risks in order to mitigate them to a reasonable extent possible. In case any issues arise or are reported, then it is the directors’ duty to immediately initiate processes for dealing with the issues or risks in question. In addition, it is their duty to put in place systems for ensuring that similar issues don’t recur again in future. Hence, it is imperative that companies carry out regular due diligence on their businesses or projects prior to any decision being taken or investment being made.
Significant governance failures
The Federal Court case was brought by the Australian Securities and Investments Commission (ASIC) against three former AMP directors, John Calvert-Jones, Alison Ashburn and Diana D’Ambra. The trio were accused of breaching their directors’ duties by failing to ensure the financial services company’s compliance with its legal obligations. The case was brought after ASIC uncovered a string of failures at AMP when it began investigating the company over its handling of the fees-for-no-service scandal in 2015. ASIC alleged that AMP had charged fees to its customers for services it did not provide and then misled them about the fees. The corporate regulator also said AMP had failed to notify ASIC about the misconduct until 2014, despite being legally obliged to do so.
Anti-money laundering deficiencies
AUSTRAC allege that Star Sydney’s anti-money laundering processes were so lax they became “merely a facade.” According to the regulator, the casino was simply not doing enough to stop gamblers using its facilities to launder money.
Misleading statements
The Australian Securities and Investment Commission (ASIC) has fined National Australia Bank (NAB) $9 million for allegedly misleading customers into believing that Star credit cards could be used to gamble. According to ASIC, National Australia Bank (NAB) was repeatedly aware that Star had allowed the use of its credit cards with UnionPay, a Chinese state-owned bank and financial services provider, but did not provide customers with clear information on this. In addition, NAB is also alleged to have “willfully” provided false and misleading information to consumers about the way their credit cards were linked with UnionPay so that consumers would be unaware that Star was in breach of its terms and conditions. This is a clear breach of the law and the Australian Consumer Law.
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Markus Cremer, born on December 4, 1988, currently resides in Sliema, Malta. He is a specialized author in the field of iGaming content, diligently producing new and professional articles for the website freespins777.net. His expertise and commitment to delivering high-quality content make him a valuable member of our WordPress editorial team.
