Star to take “appropriate steps” after report sends shares tumbling

star, sydney
The Star Sydney

Star Entertainment said it will take the “appropriate steps” to address allegations made in a media report that sent its stock plunging almost 23 percent on Monday.

In a statement to the Australian Stock Exchange, the operator said it will cooperate with relevant state and federal regulators, including Mr. Adam Bell SC, who is carrying out a regular review of the company.

However, it also said that it was concerned that the report by The Age, Sydney Morning Herald and 60 minutes contains “misleading” assertions, though added there are constraints on its ability to discuss specific individuals. 

The reports were similar in nature to those levelled against Australian rival Crown Resorts. 

These practices include welcoming unscrupulous high rollers that are allegedly involved in organized crime, drug trafficking, money laundering, tax cheating and corporate fraud. 

“Star allowed these figures to gamble vast amounts of money, ignoring a number of red flags about their conduct while wooing them with luxury goods, free hotel rooms and other incentives,” wrote the report, which claims the firms failings were exposed in internal company documents, court cases, law-enforcement intelligence briefings and those with detailed knowledge into the company’s operations. 

The investigation also found The Star guilty of allowing Chinese high-rollers to use China Union Pay Cards to withdraw vast sums of money used for gambling in a way that would disguise it as hotel expenses.

The reports into Crown triggered a series of regulatory probes. An inquiry in Sydney found the company was “unsuitable” to hold a license for its Barangaroo property, while a Royal Commission in Melbourne is due to present its findings before October 15th. Prosecuting counsel recommended that Crown by stripped of its license for its flagship property due to gross lapses in corporate governance.

Star Entertainment has a property in Sydney and also operates The Treasury in Brisbane and the Star Gold Coast. It is also building a new integrated resort in Brisbane at Queen’s Wharf.