Star Entertainment Boss Berates KPMG Audit

The CEO of Star Entertainment Group, Matt Bekier, called the KPMG audit into his under fire casino both inaccurate and wrong.

The 2018 KPMG audit into Star Entertainment is not only wrong but unacceptable. Those Matt Bekier’s words, the boss of under fire Star Entertainment Group. Bekier spoke out at the public hearings in New South Wales this week. The KPMG audit highlighted major failings in relation to Star’s anti-money laundering practices.

The Age and Sydney Morning Herald newspapers somehow got their hands on a 2018 KPMG audit. They published the report’s findings, which showed Star in a negative light. Some say the reports makes Star look worse than Crown Resorts, and we all know how that ended.

Both newspapers published details of Chinese high rollers withdrawing hundreds of millions of dollars disguised as hotel expenses. In addition, Star turned a blind eye to obvious money laundering, including a convicted cocaine smuggler spending $175 million on its pokies over 14 years without question.

Star’s share price dropped 31% following the Independent Liquor & Gaming Authority (ILGA) announced an investigation into the newspapers’ claims. That inquiry is at the public hearing stage, which is where Bekier recently took to the stand.

KPMG Report Looks Accurate

The KPMG report from 2018 showed Star disguising massive payments as hotel expenses. Paulinka Dudek, a Star senior manager responsible for compliance and risk management, admitted misleading the National Australia Bank (NAB).

Estimates show Star moved approximately $900 million using the China Union Pay cards. It only stopped using them when both Union Pay and NAB issued final threats.

Bekier labelled the KPMG audit unacceptable and contained many factual errors.

KPMG representatives revealed Star CEO Bekier met with them and discussed the audit. However, was the last to arrive and literally threw the report onto the table. “Hostile” was the word used to describe Bekier’s demeanour. He did not greet KPMG’s partners, nor did he make eye contact at any stage.

“He spent time points to things saying ‘this is wrong’, turning the page, ‘that is wrong’…doing that for a sustained period of time.”

Alexander Graham is one of the partners Bekier met with. The report’s language was Bekier’s primary concern, but Bekier did not shed any light.

“I did not receive sufficient clarity in that meeting as to the specific areas. We’d already gone through a comprehensive process to validate the findings. I would expect a CEO would have an appreciation of the finding we’d raised.”

Star Faces Prospect of Losing Its Gaming Licence

Star faces the prospect of losing its gaming licence for its Sydney casino. Furthermore, its licences in Gold Coast and Brisbane are under threat.

Crown Resorts found itself in a similar, precarious position after a royal commission into its affairs. Everything pointed to Crown losing its licence. Indeed, the inquiry deemed Crown unfit to hold a licence in Victoria but it retained it by the skin of its teeth.

Sweeping changes to Crown’s board of directors mean hardly any of the “old guard” remain at the company. Several directors fell on their swords, doing so before Crown pushed them. Furthermore, Crown revamped its anti-money laundering procedures and agreed to the spending of vast sums of money to keep compliance high.

Star has not and is not making any changes to how it is set up. The same directors are in place, and there is no way on this planet Bekier is giving up his cushy position s CEO.

The KPMG audit and subsequent NSW inquiry is damning of Star. Openly misleading banks, asking patrons to lie to reduce Star’s gaming tax, and underpaying millions to employees are only three of the findings.

Star issued the briefest of statements to the Australian Stock Exchange regarding recent media reports.

“The Star Entertainment Group refers to the various media reports regarding evidence provided in the public hearings in connection with the review of The Star Sydney being undertaken in accordance with the Casino Control Act 1992 (NSW) by Mr Adam Bell SC.

“As the review is ongoing, The Star does not consider it appropriate at this stage to comment on matters which remain before the review and which will be considered in that process.”