The Federal Court of Australia has dismissed the majority of cases brought against former directors of Star Entertainment Group (ASX:SGR).
Delivering his judgment on March 5, Justice Michael Lee ruled that the Australian Securities and Investments Commission failed to prove that the non-executive directors breached their duties of care and diligence regarding the company's exposure to high-risk junket operators.
While the board was largely vindicated, Justice Lee made adverse findings against former CEO Matt Bekier and former Chief Legal Officer Paula Martin.
The court found that Bekier should have been aware of critical reports concerning junket figures Qin Sixin and Alvin Chau, noting that other directors relied heavily on the information he provided.
Justice Lee emphasised a clear distinction between management and the board, stating that "proper governance relies on the quality of material being produced."
The judgment also served as a broader warning to the corporate world regarding "oppressive" board packs and the "shadow use" of artificial intelligence.
Justice Lee observed that while the sheer volume of documents—often hundreds of pages—can lead to "directorial triage," directors cannot use information overload as an excuse for poor oversight.
He cautioned that any future use of AI to summarise board materials must be transparent and controlled.
Of the nine executives and directors sued by ASIC, only Bekier and Martin provided cross-examination testimony, with the judge ultimately finding that Martin had "reconstructed events" to align with the documentary evidence.
At the time of reporting, Star Entertainment Group's share price was $0.115.