A year after the launch of the Bell review unearthed serious misconduct by senior management at The Star Entertainment Group (ASX: SGR), the company has announced the last of the company’s old guard, interim chairman Ben Heap, will retire next week.
Heap, one of 11 directors and senior executives named in a civil action brought by the Australian Securities and Investments Commission (ASIC) in December last year, will be replaced by former Suncorp Bank (ASX: SUN) CEO and current G8 Education (ASX: GEM) chairman David Foster.
The appointment by the casino group completes the board cleanout which began in March last year with the resignation of former CEO Matt Bekier.
As interim chairman, Heap was the last board member left to issue an ‘unreserved apology’ to the people of NSW after the release of a blistering NSW Independent Casino Commission (NICC) report following the Bell inquiry that found the casino giant was enabling suspected money laundering and organised crime activities through its VIP operations.
The findings led to a $100 million fine for The Star by the NICC last year and a second $100 million fine following a subsequent inquiry by the Queensland Attorney-General.
Heap, in a statement by The Star to the ASX today, said that since his appointment in May 2022, the company had ‘evolved in a timely but measured way’.
“I would like to express my appreciation to the board and management for their continued support during my tenure as chairman,” said Heap, who replaced former chairman John O’Neill following an exodus of board members during the NSW Independent Liquor and Gaming Authority’s (ILGA) review of The Star.
“I have every confidence The Star will be a powerhouse of the Australian tourism and entertainment sectors for decades to come, employing thousands of people across stunning locations in Sydney, Brisbane and the Gold Coast.”
Foster will step up to the chairman’s role on 31 March, three months after joining the company’s board, and will work alongside CEO Robbie Cooke.
Foster said he was ‘delighted’ to assume the role of chairman and would continue ‘with an unwavering focus’ to try and earn back the trust of the community.
“Ben has played a pivotal role over what has been a challenging period for The Star,” said Foster, who is also a current director of Bendigo and Adelaide Bank (ASX: BEN).
“He provided leadership and stability at a critical time, which included overseeing the appointment of our new CEO, renewal of the board and a re-set of the balance sheet.
“These were important and fundamental steps that have now been completed as the company rebuilds towards an exciting new era.”
For The Star, the news comes just two days after the company pleaded guilty to seven charges in Queensland under Section 66 of the Casino Control Act which prohibits the purchase of gambling chips with a credit card.
The offences occurred between 2 June 2017 and 29 December 2018, and between 23 March 2022 and 2 April 2022. Sentencing is set for 2 June 2023.
The leadership refresh also follows The Star’s $800 million equity raise in February, with funds raised in order to meet capital requirements and shore up capital ahead of anticipated regulatory uncertainties following a $1.3 billion half-year loss.
The blown-out losses were the result of protracted regulatory and legal action levelled against The Star during 2022, including two high-profile reviews of its casino licence in NSW and Queensland.
Were it not for a nearly $1 billion impairment on the group’s Sydney casino operation, The Star would have achieved a net profit after tax of $44 million.
It also comes one week after The Star put its Sheraton Grand Mirage Resort on the market in an attempt to cash in on the Gold Coast’s hotel boom with a price expectation of around $200 million.
The Star appointed Colliers, McVay Real Estate and JLL to manage the campaign which aims to capitalise on the Gold Coast’s resurgent hotel sector, led by the opening earlier this year of The Langham, Gold Coast in Surfers Paradise.
Sheraton Mirage, which is located on a 3.45ha site with 300 metres of absolute beachfront at Main Beach, has 295 rooms and was bought by The Star for $140 million in 2017.
Get our daily business news
Sign up to our free email news updates.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support