The Star Entertainment Group has been served with another class action in the Supreme Court of Victoria, with Maurice Blackburn serving the casino operator a statement of claim.
The claim alleges that in the period from 29 March 2016 to 16 March 2022, the Star had inadequate systems and processes for ensuring compliance with its obligations under anti-money laundering and counter-terrorism financing laws, and had inadequate systems and processes for ensuring compliance with Australian regulatory obligations.
This action follows damning revelations made in a joint investigation by news program 60 Minutes, The Sydney Morning Herald and The Age into Star on 10 October 2021 claiming the group had cultivated high-roller players who were allegedly associated with criminal or foreign-influence operations.
At the centre of the revelations is a 2018 audit report prepared by KPMG and presented to Star’s board’s audit committee which set out deficiencies in the Star’s systems and processes, noting, among other things, that there was “inadequate resourcing in place to operate the AML/CTF Program” and that its risk assessment system “does not consider terrorism financing as required by the AML/CTF Act”.
In response to those media reports, Star’s share price declined by about 25 per cent, wiping more than $1 billion from the company’s value.
Following the media revelations, an Independent Review of Star’s suitability to hold a casino licence in New South Wales was established under the Casino Control Act 1992 (NSW).
Adam Bell SC was appointed as the Commissioner to head the Review. The Bell Review uncovered further alleged misconduct and found Star “presently unsuitable to hold a casino licence” in NSW.
A further review was established in Queensland under the Casino Control Act (1982) with Robert Gotterson appointed to conduct the review. Following the release of the Gotterson Review, the Queensland Attorney-General announced that she had formed the view that Star was unsuitable to hold a casino licence in Queensland.
The class action claims that Star engaged in misleading and deceptive conduct; breached its continuous disclosure obligations; and conducted its affairs contrary to the interests of shareholders as a whole in the period.
The claim follows a similar securities class action filed by Slater & Gordon on 30 March 2022.
The Star said in a statement it intends to defend the proceedings.
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