Board exodus gathers pace at The Star after O’Neill resigns as chairman

Board exodus gathers pace at The Star after O’Neill resigns as chairman

The Star Entertainment Group (ASX: SGR) is now on the hunt for a new chairman as well as a new CEO following the resignation of John O’Neill as executive chairman.

The announcement, made after the market closed on Friday evening, comes ahead of O’Neill’s scheduled appearance before the NSW Independent Liquor and Gaming Authority (ILGA) review next week.

O’Neill assumed the executive chairman’s role following the departure of CEO Matt Bekier on 28 March amid damning evidence given to the ILGA review of the group’s suitability to hold a casino licence.

The chairman’s decision to resign comes as no surprise following Star director Sally Pitkin’s evidence to the review that she was expecting a mass resignation of the board in the fallout from the inquiry. Pitkin, who is also chair of Super Cheap Retail Group (ASX: SUL), has already announced her intention to resign from The Star board by the end of this financial year.

O’Neill, a former CEO of Australian Rugby Union, has been chairman of The Star and its former entity Echo Entertainment Group since 2012. The Star announced to the ASX that O’Neill had tendered his resignation on Friday, although the date of his departure has yet to be determined.

“Mr O’Neill informed fellow directors late today of his decision,” says The Star in the statement released on Friday evening.

O’Neill was appointed executive chairman on 1 April after Bekier tendered his resignation, assuming the leadership role at the casino group while the search for a new CEO began.

The Star had seven directors prior to the ILGA review, but now there are only two directors who are yet to signal their intentions to resign.

Prior to O’Neill’s official resignation and Pitkin announcing her decision to quit, non-executive director Gerard Bradley indicated his intention to step down in the coming months while fellow director Katie Lahey also revealed her plan to follow suit.

While non-executive directors Ben Heap and Richard Sheppard have not shown their hands yet, both have told the review that board renewal was needed at The Star.

Their call follows damning revelations of a culture of silence and cover-up among The Star’s senior management team that could have exposed the casino group to illegal money-laundering activities over many years.

Evidence at the ILGA review revealed that $900 million was filtered through The Star between 2013 and 2020 from Chinese high rollers hosted by Chinese junket operator Suncity Group. The VIP customers used China Union Pay debit and credit cards to make withdrawals of up to $22 million for gambling at a private gaming room, with employees from The Star facilitating the transactions despite knowing they contravened the card operator’s terms of use.

Former CFO Harry Theodore, chief NSW casino officer Greg Hawkins and chief legal and risk officer Paula Martin, all of whom gave evidence expressing knowledge of these matters to varying degrees, have since resigned.

O’Neill is set to give evidence to the review when hearings resume on 23 May. He is scheduled to appear after Star director Richard Sheppard next week. Sheppard has been called to give further evidence to the review after taking the stand earlier this month.

While the fallout from the ILGA review is expected to see the entire board replaced over time, as The Star has acknowledged the need for ‘accelerated board change’, the company also says this will be done in a ‘timely manner’ noting the ‘need for stability’ during this transition.

 

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