Three directors of the company behind the deadly Stereosonic music festivals have resigned.

The departures from SFX-Totem Operating Pty Ltd include high-profile former managing director Dror Erez, who vacated his board position on January 11.

Two other directors have also exited – Adelaide-based businessman James Beatty and company secretary Amanda Hough.

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The resignations come at a sensitive time for the Australian business, which recently became a wholly-owned subsidiary of the New York-based group, SFX Entertainment.

On Monday, the financially-stressed American parent company applied to US regulators for bankruptcy protection.

The group operates dance music festivals across the globe, including the Stereosonic and the A State Of Trance events in Australia at which three people died and hundreds of drug-affected patrons were hospitalised last year.

The departure of Mr Erez and the other local directors means that all board members of the Australian company are now overseas-based.

Revellers party on Sydney Harbour at the launch of this year’s Stereosonic events. Photo: AAP

Mr Erez and several other former directors of SFX-Totem are believed to have collectively pocketed $US75 million for selling the controversial local operations to the American company.

The New Daily on Tuesday night sought comment from Mr Erez after making contact with his legal representative, but he did not respond to our request for an interview.

Plans for local festivals to continue

In a statement posted on its website, SFX-Totem (which trades as “Totem Onelove”) said on Monday the local operation would be unaffected by the American parent’s decision to file for bankruptcy protection.

“Totem Onelove will continue to operate as normal,” the company said.

“We are cash-flow positive, can and will pay business expenses and remain committed to planning for, preparing, and producing the festival and events we are known for.”

The statement did not make any reference to the board shake-out and a public relations firm representing the Australian operation did not respond to questions from The New Daily about the departure of Mr Erez.

The local arm described the bankruptcy filing by its American parent as “a positive turn of events”.

“SFX is not going out of business and, in fact, has received a sizeable capital infusion to pay for ongoing operating expenses,” the Australian company stated.

“We at Totem Onelove see this as a positive turn of events for the SFX North American businesses that can now focus on the future.”

Many of the festivals have been embroiled in drug controversy. Photo: EPA

The US-listed shares of SFX Entertainment have crashed more than 95 per cent since the company listed in 2013, which means that most stakeholders are sitting on massive capital losses.

Mr Erez and other former owners of the Australian arm were last year compensated by the US parent for the slide in the value of their shareholdings.

Politicians still demand answers to 2015 deaths

South Australian senator Nick Xenophon has called for an inquiry into the policing of the Stereosonic festivals across Australia which he said were “awash with pills”.

Mr Xenophon is agitating for a crackdown on the dance festival scene after the deaths of Adelaide man Stefan Woodward and Sydney 25-year-old Sylvia Choi at Stereosonic events in December.

Meanwhile, SFX Totem is continuing to market its next electronic dance events known as “Atlantis” that will be staged in Sydney and Melbourne in the second week of March.