Star Entertainment Accused of Misleading Investors by Denying Media Exposé

Posted on: May 11, 2022, 11:32h. 

Last updated on: May 11, 2022, 03:39h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

On Wednesday, an inquiry into Star Entertainment’s suitability to hold a license in the Australian state of New South Wales questioned whether the company misled investors. That’s following media accusations of links to money laundering and organized crime.

Star Entertainment director Ben Heap was grilled about a statement filed to the ASX last Oct. 11 in the wake of explosive revelations in The Age, Sydney Morning Herald, and current affairs show 60 Minutes.

In the filing, Star told shareholders it was “concerned by a number of assertions within the media reports that it considers misleading.”

Investors did not appear to be reassured by the message. By the end of trading on October 11, Star’s stock had crashed by almost 23%, wiping nearly $A1 billion ($740 million) off the company’s market value.

‘Sensationalism’ Claim

“Are you concerned, reading this [the ASX filing] now, that by focusing on the matters you consider to be misleading, as opposed to the matters you consider to be substantively accurate, the ASX announcement of 11 October was itself misleading?” asked counsel assisting the inquiry Casper Conde, as reported by Business News Australia.

“I think the point we were trying to achieve with this announcement was to make sure the market understood that we didn’t accept all of the findings,” Heap replied.

He added there was a “level of sensationalism” in the reporting that “didn’t reflect the way we saw it.”

The reports claimed the company wooed suspected criminals, foreign agents, and fraudsters to gamble at its casinos from at least 2014 to 2021.

These included Chinese crime boss Tom Zhou and property billionaire Huang Xiangmo, who was accused by the Australian government of being a “foreign influence agent” and banned from the country as a national security risk.

Union Pay Racket

The reports also asserted that CEO Matt Bekier ignored an internal report by third-party consultant KMPG that Star was not complying with anti-money laundering laws. Bekier resigned in March.

CUP cards cannot be employed for gambling purposes as a condition of their use. The practice also violated Chinese government regulations designed to prevent capital flight.

Heap had earlier told the inquiry the media allegations were “substantively accurate.”