Australia’s Star casino group has endured a tumultuous week after appointing two new non-executive directors just days from being served with a securities class action lawsuit in the Supreme Court of Victoria.
Star Entertainment Group owns a number of casinos across Australia but has been under the spotlight for some months following investigations into alleged illegal activities at some of its venues.
The media revelations from 60 Minutes, The Sydney Morning Herald and The Age in October last year sparked scrutiny of Star, and triggered a number of official investigations from individual state authorities.
The Brisbane headquartered Group is under scrutiny in New South Wales and Queensland after both states found the casinos’ governance was unstable, and recommended a stripping of the group’s operating license – since rebuffed due to staff concerns.
Since then Star is understood to have worked with authorities in an effort to overhaul its procedures and effectively clean up its act.
But a new class action has now been filed in the state of Victoria, alleging misleading representations over its anti-money laundering efforts and counter-terrorism financing obligations and counter-terrorism financing obligations.
Latest Blow For Star
The class action lawsuit after law firm Maurice Blackburn has been filed in the Supreme Court of Victoria. It alleges the company made misrepresentations over its systems and processes for compliance with anti-money laundering and counter-terrorism obligations. It is also claimed Star failed to properly report this to the market, engaged in misleading and deceptive conduct, and breached a number of other disclosure obligations.
Star intends to defend the allegations, which are focused on a period between March 29, 2016, and March 16, 2022.
Star, meanwhile, is already due to pay an A$100m ($62m) penalty handed down by the New South Wales Independent Casino Commission, following the inquiry in the state earlier this year.
And it was issued with show cause notices for its two Queensland casinos by the Office of Liquor and Gaming Regulation (OLGR) earlier this month.
New Directors On Board
Amid the turmoil, Star has moved to bring in new directors to help steady the ship as we enter the Australian summer.
Deborah Page is currently Pendal Group chairperson, and a non-executive director of Brickworks, Growthpoint Properties Australia Limited, and Service Stream Limited. Toni Thornton is a non-executive director of G8 Education Limited and CS Energy, and has worked in corporate finance for more than 15 years.
Page will join the board on February 1, and Thornton as soon as her position is approved by regulators.
“On behalf of the board, I welcome Deborah and Toni during this time of significant organisational and cultural change,” Star chairman Ben Heap said. “They bring a fresh set of skills and diversity of experience to our board.
“Deborah and Toni will each play an important role as we continue to remediate and transform The Star.”
It is hoped that more experience at board level will help steer Star through a tricky period that has been dogged by scandal since the media revelations a year ago.
