Phi Finney McDonald commenced a class action against The Star Entertainment Group Limited (Star) in the Supreme Court of Victoria. The class action was brought on behalf of investors who acquired an interest in or held Star shares over the period 29 March 2016 and 13 June 2022 inclusive (the Claim Period).
The representative plaintiff for investors was Jowene Pty Ltd (ACN 001 714 585), as trustee for Biro Citer Souvenirs Pty Limited Pension Fund.
Background
Star is a gaming, entertainment and hospitality group, which includes the operation of three Australian casinos. Star held casino licences for the operation of a casino in Sydney (The Star Sydney), and two casinos in Queensland (Treasury Brisbane and The Star Gold Coast).
The class action follows a media exposé on 10 October 2021 reporting non-compliance by Star with anti-money laundering and counterterrorism (AML/CTF) law, governance failures, and instances of activity with persons with criminal connections. On 11 October 2021, the price of Star shares fell more than 20%.
Mr Adam Bell SC was scheduled to conduct a regular review of The Star Sydney casino operations for the NSW casino regulator. Following the media reports, on 19 October 2021 he requested public hearings be included in his review. Following that news, Star’s share price declined further.
After the first two days of the public hearings in March 2022, and further revelations, the share price again declined.
On 14 June 2022 the Queensland Attorney General announced an independent expert review into the suitability of Star to continue to hold casino licences in Queensland.
On 17 October 2022 Star released an ASX announcement stating that it had received written notice from the NSW casino regulator that disciplinary action would include the imposition of a pecuniary penalty of $100 million (the maximum) as a result of Star’s misconduct identified by Mr Bell SC’s report, and that The Star Sydney’s casino licence would be suspended indefinitely from 21 October 2022.
Allegations
The class action alleged that Star breached its continuous disclosures obligations, and engaged in misleading and deceptive conduct and related contraventions, by failing to inform investors of:
- Star’s non-compliance with AML/CTF law;
- conduct disguising gambling money as hotel expenses;
- information contained in a KPMG audit advice received in May 2018 by Star’s CEO and Chairman;
- other compliance and governance deficiencies; and
- Star’s exposure to regulatory action, including in relation to its suitability to hold a casino licence.
The proceeding alleged that material information was withheld from Star investors between 29 March 2016 and 13 June 2022 (inclusive), during which time the share price was inflated.
On 27-28 June 2023, the Supreme Court of Victoria heard a multiplicity dispute concerning four overlapping shareholder class actions against Star. On 19 September 2023, the Court awarded carriage to Slater and Gordon.
Class Action Information and Registration
The class action was funded by Woodsford and has now been stayed.
Phi Finney McDonald is no longer accepting registrations for this class action. Star investors should contact Slater and Gordon at star@slatergordon.com.au or by calling 1800 071 827.