S
tar Entertainment is facing a class action lawsuit threat after a share price collapse of nearly A$1 billion (USD 741.5 million). The Australian gaming giant lost its shareholder value following revelations of alleged failures to confront money-laundering and terrorism-financing risks.
Law firm Maurice Blackburn has begun preparing the lawsuit on behalf of Star’s investors, revealed The Sydney Morning Herald, following a report by the cited news source, and The Age and 60 Minutes last week.
According to the revelations, Star has been enabling suspected money laundering and organized crime in its Sydney, Brisbane and Gold Coast casinos for years.
“Shareholders rightfully expect casino operators to rigorously comply with anti-money laundering and counter-terrorism financing laws because casinos are unmistakably targets for criminal activity,” said Maurice Blackburn principal Vavaa Mawuli.
Mawuli further said the fact that these concerns were raised in 2018 and not disclosed to the market “raises real concerns” about Star’s governance and shareholders “should be rightfully concerned.”
She also explained the class action would allege Star engaged in misleading and deceptive conduct, breached its continuous disclosure obligations and conducted its affairs contrary to the interests of members as a whole in the period.
Two confidential reports were provided in 2018 to the operator’s board, warning the company’s anti-money laundering risk-assessment system did not consider “terrorism financing as required by the AML-CTF (anti-money laundering and counter-terrorism financing) Act.”
Star’s assessments of some gamblers appeared to “understate” the level of money-laundering risk, with no documented money-laundering risk assessment or risk-assessment methodology in place for Chinese high-roller tour groups (also known as junkets).
The day after the findings were published, on October 11, the company’s share price plunged more than 20%: this wiped out nearly A$1 billion from its market value. Even though shares have since recovered slightly, they are still trading about 17% lower than at the start of the month.
The media reports also prompted Queensland’s Office of Liquor and Gaming Regulation to announce a new investigation over the money laundering claims, according to the state’s Attorney-General. The regulator will work in conjunction with the Queensland police and the AML agency AUSTRAC.
In a statement last week, Star said that the media reports were “misleading,” and announced it would be taking “the appropriate steps” to address all allegations with relevant state and federal regulators and authorities.
Star has also claimed that it acted upon the recommendations of the reports by adopting an updated AML and counter terror financing program in October 2018, as well as having undertaken a program to enhance its compliance framework with board oversight.
The Star is Australia’s second-biggest casino, and its current situation has led to comparisons to Crown Resorts’ case. Crown has been found unsuitable to hold a license in Sydney pending a variety of changes to its corporate practices, and faces another Royal Commission into its Western Australian casino, Crown Perth.
The casino operator has been found as responsible for facilitating money laundering and to have been infiltrated by organized crime, which led to resignations of high-profile board directors and executives.
Original article: https://www.yogonet.com/international//noticias/2021/10/18/59785-the-star-under-class-action-threat-after-a1b-share-price-slump
