Star Entertainment (ASX: SGR) faces a second securities class action lawsuit that alleges shareholders were misled by the casino’s gross dysfunctional governance and oversight which led to potential breaches of anti-money laundering (AML) obligations and counter-terrorism financing (CTF) risks.
Law firm Maurice Blackburn lodged a claim on behalf of shareholders in the Victorian Supreme Court today accusing Star of engaging in misleading and deceptive conduct between March 29, 2016 to March 16, 2022 by not disclosing relevant information about matters relating to AML and CTF risks to market.
Shares in the embattled casino fell 23% on October 11, 2021, wiping $1 billion off Star’s market value after revelations were exposed during an episode of 60 Minutes, revealing how the Group became a magnet for alleged organised criminals and money laundering.
The investigation headed by the news program was joined by The Sydney Morning Herald and The Age (both owned by the producer of 60 Minutes) which accused Star Entertainment of enabling suspected money laundering, fraud across its business and unwanted international interference into its Australian operations. This in turn prompted two independent enquiries headed by regulatory bodies in NSW and Queensland, both states the business operates its casinos, stating that the Company was unfit to hold a gambling licence – further updates are yet to come.
Maurice Blackburn stated in today’s filing that “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.”
The Star responded with an announcement to market stating the Company “intends to defend the proceedings” and mentioned that today’s claim is “substantially similar” to a separate class action filed by law firm Slater & Gordon on 30 March, 2022.
Slater & Gordon’s lawsuit followed in a similar fashion after the 60 Minutes episode in 2021, which has been assessing whether investors had a strong case against the Star. Updates and further information from both lawsuits are yet to surface.
For the second-half FY22, Star Entertainment reported net profit after tax of $42 million, clawing back at the $74 million loss from the first-half FY22.Gross revenue was $1.53 billion, increasing 2% year-over-year, while the bottom line was impacted by operating costs ballooning to $482 million, a 7% increase year-over-year.
If you are a holder of SGR shares between October 2015 until October 2021 and wish to participate in the class action lawsuit, you can do so here.
Trading Desk Assistant at Emerald Financial
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