Australia casino giant Star Entertainment is facing a fourth class action in the Victorian Supreme Court after solicitors from law firm Shine lobbed a shareholder claim against the business. Shine’s lawsuit follows three other class action law firms lining up to represent shareholders aggrieved by the alleged mismanagement of the operator.
Shine alleged in its 308-page statement of claim that the company misled and deceived the market, breached continuous obligation laws and caused the “stock price to plummet” between March 9, 2016, and May 25, 2022, reports Australian Financial Review.
Shine’s joint head of class actions, Craig Allsopp said “investors were the biggest losers of Star’s gamble with the truth.” The firm alleges that Star failed to make disclosures to the market about money laundering, links to organized crime, fraud, corruption, terrorism-financing risks and associated regulatory risk involved in its misconduct, even after they were raised in a 2018 report prepared by consultancy firm KPMG.
Allsopp said in the statement: “We allege Star knew, or ought to have known, that this wide-ranging misconduct occurred and that it would have a hugely detrimental impact on its shareholders once exposed. Star represented to investors that it was a safe bet, when it was anything but, and we’ll be looking to hold Star to account for their losses.”
Star said in a statement to the ASX it intended to defend the action. The company also faces several fines if the Federal Court upholds AUSTRAC’s allegations of widespread money laundering.
The Shine statement of claim highlights the 23% fall in Star’s share price in October 2021 after a series of reports in The Sydney Morning Herald, The Age and 60 Minutes alleging that the company had ignored and downplayed money laundering risks.
Star’s shares have traded even lower, down 33% to AUD 1.02 since December 16, after the NSW government declared it would slap a tax on the state’s two casinos, Star and Crown Sydney, to raise an additional AUD 364 million over three years.
Last year, a NSW inquiry found Star was unfit to run the Sydney casino after it was proved that it had allowed itself to be infiltrated by organized crime gangs, side-stepped rules and deliberately misled the regulator and its bankers over the “inherently deceptive and unethical process” of the China UnionPay card.
The NSW Independent Casino Commission has since suspended the company’s Sydney casino license and appointed Nick Weeks as special monitor to run the casino until January 19 next year.
The Queensland government followed the NSW commission’s lead, but did not suspend Star’s casino licenses in Brisbane and the Gold Coast, instead opting to levy an AUD 100 million fine and appoint a second monitor to assist Weeks to oversee its casinos in the state.
Original article: https://www.yogonet.com/international/news/2023/02/13/66067-star-shareholders-lob-fourth-class-action-against-company-alleging-mismanagement-compliance-breaches
