As reported by Bloomberg, shares in the company lost as much as 7% before trading down 2.9% at AU$3.215 at 11.40am local time. It’s the lowest figure since October 2020, and cut the group’s market value to AU$3bn (US$2.22bn).
It comes amid the inquiry into The Star which is currently determining the group’s suitability to run its flagship casino in Sydney.
According to The Sydney Morning Herald, day one of the inquiry heard that the operator disguised AU$900m of gambling transactions on Chinese debit cards as hotel expenses. The misrepresentation of funds means lying to banks, and therefore fraud.
The inquiry, launched by the NSW Independent Liquor & Gaming Authority, detailed the involvement of CFO Harry Theodore and General Counsel Oliver White. Both were alleged to have misled NAB and China UnionPay over transactions in 2019.
Payments were allegedly accepted from UnionPay bank cards at a number of the operator’s partner hotels and transferred to The Star casinos in Sydney and Brisbane.
The process left the company open to money laundering, allowing its patrons to avoid China’s capital controls, while at the same time breaking an agreement with the merchant bank NAB.
Public hearings continue, with huge concern around the operator after similar transgressions by fellow Australian company Crown Resorts were uncovered last year. Crown has since been subject to strict regulatory limitations and oversight.
