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Class action launched against The Star
In the midst of a public inquiry into the casino’s licence and operations, The Star Entertainment Group has been hit with a class action alleging money-laundering breaches.
Lauren Croft
The class action, filed in the Victorian Supreme Court by Slater and Gordon, will seek compensation for investors and accuses The Star of making misleading or deceptive representations about its compliance with regulatory obligations.
In response to those media reports, The Star’s share price declined by over 25 per cent, wiping more than $1 billion from the company’s value.
The allegations also prompted the Independent Liquor and Gaming Authority to announce an inquiry into whether The Star remained suitable to hold its casino licence. The class action accuses The Star of misleading investors whilst failing to mitigate corruption, money laundering and bribery.
The royal commission-style investigation began earlier this month and has so far heard evidence that The Star misled its banks and the NSW casino regulator, ignored clear risks of money laundering occurring at its properties, and had otherwise failed to operate ethically.
Slater and Gordon class actions senior associate Ben Zocco said the firm’s investigation into whether investors had a case against The Star began last October, and the analysis undertaken to date suggested that investors had a strong case.
“For the last six years, The Star has held itself out to be a model casino operator that took its obligations seriously and followed not only the letter of the law, but the spirit of the law,” he said.
“Star insisted that it took compliance seriously and ran its business ethically, honestly and with integrity. Our investigations to date, in addition to the extraordinary evidence revealed so far in the Bell inquiry, suggests that they did everything but.
“When investors purchase shares in a listed company, they are entitled to assume that all of the material information relevant to its financial position had been disclosed to the market. Our case is that Star failed to do so, and, therefore, investors are entitled to compensation for their losses.”
Lead plaintiff David Lynch said that he was disappointed to see the value of his shareholding fall so significantly and was concerned that the company may have misled him and other shareholders by representing that it was far more compliant with its regulatory obligations than was actually the case.
“As an investor, I expect that licensed operators that are publicly listed will operate in accordance with the law, and that there are appropriate checks and balances to ensure they do so. I am dismayed by the apparent scale of The Star’s misconduct that is now being revealed in the public hearings.”
This comes after Matt Bekier, The Star Entertainment Group chief executive and managing director, resigned from the company’s board on Monday (28 March), effective immediately, as a way to take “responsibility” for the misconduct revealed as part of the inquiry.
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
