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The Star Entertainment Group's (ASX: SGR) chairman John O'Neill AO will temporarily fill the shoes of outgoing CEO Matt Bekier and receive an extra $1.5 million per annum for the trouble, as the company enters the 12th day of an inquiry into its suitability to hold a casino licence in New South Wales.
O'Neill will assume executive chairmanship immediately and carry out his duties in the role until executive search firm Spencer Stuart finds a new managing director and CEO.
The Star has committed to embarking on a "program of renewal" in a timely manner.
"While the board considers it critical that the company has stability in this transitional period to a new managing director and CEO, it acknowledges the need for accelerated board change," the company stated in a release to the ASX this morning.
"As The Star continues to focus on its day to day business it is also committed to its more than 8,000 team members after two years of COVID related shutdowns and restrictions."
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The sharp drop in the SGR share price over recent months - combined with the example set by Crown Resorts (ASX: CWN) following its numerous inquiries and Royal Commissions that resulted in board change and an $8.9 billion takeover from US investment manager Blackstone - appears to have spelled opportunity for a new substantial investor.
It was revealed today that Boston-headquartered State Street Corporation acquired more than 51 million shares in The Star on Wednesday, 30 March, giving the US company a 5.38 per cent voting power.
The price paid by State Street for the shares was not revealed, but on the closing price of that day the transaction may have been worth $163.96 million - a $27 million discount to what that stake would have been worth just over two weeks prior, or a $69 million discount versus October 2021.
"The company’s constitution, as well as certain agreements entered into with Liquor and Gaming New South Wales and the Queensland Office of Liquor and Gaming Regulation, contain restrictions prohibiting an individual from having a voting power of more than 10 per cent in the Company," The Star stated.
"The company may refuse to register any transfer of shares which would contravene these shareholding restrictions or require divestiture of the shares that cause an individual to exceed the shareholding restrictions."
Last week, the company's former chief risk officer Paul McWilliams told the independent inquiry both O'Neill and Bekier were unhappy with the language used in a 2018 KPMG report detailing failings in Star's anti-money laundering program.
"My recollection of Mr O'Neill's contribution was that he found the tone - the style of language used in the report more offensive," McWilliams told Barrister Caspar Conde, who is assisting Adam Bell SC in the inquiry.
"I don't think he would hold himself out as being an AML expert. That's not a criticism. It was just the language was - is quite direct in this report and is suggestive of 30 obvious material deficiencies - fundamental deficiencies, to use your word - in aspects of the program, and I think he took exception to that style of language."
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