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‘Failure to disclose alleged crime links’ could lead to class action against The Star

Shine Lawyers is encouraging investors in the Star Entertainment Group to register their interest in a potential class action against the company after it “failed to inform the market of money laundering, organised crime and fraud allegations”.

user iconJerome Doraisamy 25 October 2021 Big Law
Rebecca Jancauskas
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Rebecca Jancauskas (pictured), who is the class actions practice leader at plaintiff firm Shine Lawyers, said that the firm is currently investigating whether or not Star Entertainment Group engaged in misleading and deceptive conduct, breached its continuous disclosure obligations, and conducted its business in conflict with the interest of shareholders.

Earlier in October, Nine Entertainment reported that the Star Entertainment Group was warned in 2018 that its efforts to prevent money laundering, terrorism finance and corruption in its casinos were “inadequate”.

Multinational professional services firm KPMG also published a report, outlining that the company had no documented risk assessment process for Chinese high-roller tour groups, that it understated the risk of money-laundering among gamblers, and that it did not consider terrorism financing as required by the Anti-Money Laundering and Counter Terrorism Financing Act 2006.


The report, Shine noted, had not been disclosed to the ASX.

After the reports from Nine Entertainment, the share price for Star Entertainment Group (ASX: SGR) fell by 23 per cent, which wiped “an estimated $1 billion” off the company’s market value.

“This explosive report by KPMG should have been immediately disclosed to the market given the seriousness of the allegations against the Star Entertainment Group,” Ms Jancauskas argued.  

“The company’s alleged attempts to cover up this scandal blew up in its face, and investors deserve to be compensated for the financial loss they have suffered.”

The company “has had years to clean up its act”, Ms Jancauskas continued.

“[It] says it has implemented the recommendations of the KPMG report, but police in New South Wales recently alleged a suspected drug-trafficker was until this year laundering money through its Sydney casino,” she submitted.  

“Star casino’s high roller gaming manager is also reported to have maintained a relationship with accused corporate criminal Michael Gu, who allegedly punted millions of dollars at the venue between 2018 and 2020.

“The Star Entertainment Group’s reputation as a supposed cleanskin of the gambling industry is in tatters, and I suspect shareholders will be horrified by the evidence revealed at what looks likely to be a public inquiry in New South Wales,” Ms Jancauskas noted.

Elsewhere, Queensland Attorney-General Shannon Fentiman recently announced that allegations concerning the company’s casinos in Brisbane and the Gold Coast are being investigated by the state’s Office of Liquor and Gaming Regulation, the police, and AUSTRAC.

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