In Australian Securities and Investments Commission v Bekier (Liability Judgment) [2026] FCA 196, the Federal Court of Australia has found that the Managing Director and CEO of Star, a casino operator, and its Company Secretary and Group General Counsel, breached their duties of care and diligence as company officers under section 180(1) of the Corporations Act. Background.

Two other Star executives had previously admitted to breaches of their duties and been penalised.

ASIC’s action related to two main issues: Star’s dealings with Macau junket operators, which involved criminal risks, and misleading statements provided to NAB regarding the use for gambling of debit cards issued by China Union Pay International Ltd at NAB ATMs located on Star’s premises. 

Justice Lee dismissed ASIC’s claims against the 7 non-executive directors, including the Chair, that they should have taken action over these issues, even though management failed to properly inform them.

In the 501 page judgment, he expressed a ” sense of disquiet” about the non-executive directors’ conduct, and commented as follows:

“It is not a portrait of directors actively pressing management with difficult questions as to whether the business was being conducted ethically, lawfully, and to the highest available standard. The contemporaneous minutes disclose little by way of sustained scrutiny or insistence upon explanation in circumstances where risks were obvious. There is one notable exception, when Mr Sheppard did seek to interrogate the credit evaluation process and underlying commercial arrangements, but this incident stands out because it is exceptional.”…

“The directors .. had assumed a governance role in a company operating a casino. This was no ordinary enterprise, and the role demanded vigilance. … The “culture” that prevailed was so dysfunctional and unethical that senior management was tardy in preventing junket operators from behaving inappropriately and lied to its bankers to secure an ongoing commercial advantage. Ultimately, it fell to investigative journalism, and then a statutory inquiry, to expose the extent of the problems. …the more self-congratulatory submissions of the non-executive directors are jarring.

The successful defendants were on far surer ground in correctly insisting that: s 180(1) does not demand omniscience or impose a “standard of perfection”; that management failed; that this case was not some sort of freewheeling inquiry into the board’s discharge of its duties; and that ASIC bears a heavy persuasive onus and must be confined to its pleaded case.”

With respect to director liability, Justice Lee endorsed the general principles decided in the Centro case:

• Directors are now required to take reasonable steps to place themselves in a position to guide and monitor the management of the company;
• This means that a director should become familiar with the fundamentals of the business or businesses in which the corporation is engaged; a director is under a continuing obligation to keep informed about the activities of the corporation; directorial management requires a general monitoring of corporate affairs and policies (including by way of regular attendance at board meetings); and a director should maintain familiarity with the financial status of the corporation by a regular review of financial statements;
• While directors are required to take reasonable steps to place themselves in a position to guide and monitor management, they are entitled to rely without verification on the judgment, information and advice of management and other officers, at least except where they know, or by the exercise of ordinary care should have known, facts that would deny reliance.

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Author: David Jacobson
Principal, Bright Corporate Law
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The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.