The Star’s shares dive following shock inquiry news
Star Entertainment Group has indefinitely delayed the release of its half-yearly results after it was blindsided by the NSW casino regulator’s decision to launch a second probe into its operations.
The embattled casino giant told investors on Tuesday it welcomed the “objective forum” which would allow it to demonstrate its capability to return to suitability. Its shares plummeted by more than 23 per cent in early trading.
“The Star intends to participate in the inquiry in an open, transparent and facilitative manner,” the ASX-listed casino operator said in a statement to investors.
Chief executive Robbie Cooke was due to unveil Star Entertainment’s half-year results on Wednesday, but the company said on Tuesday it needed more time to consider the impact of the inquiry on its interim report and would provide an updated timeframe in the coming days.
The NSW Independent Casino Commission told this masthead on Monday it had commissioned barrister Adam Bell SC to launch a 15-week inquiry into The Star to assess the progress made since the company was overhauled following his 2022 report, which found extensive anti-money laundering and counterterrorism failings.
Bell will now be tasked with looking into issues of culture and risk management, financial resources, management and reporting structures, compliance with internal control measures relating to customer risk, financial transactions and due diligence. His report is due on May 31.
Star Sydney’s licence has been suspended by the NSW regulator on Bell’s recommendation. The casino has been operating under special manager Nicholas Weeks, whose term has been extended three times because the regulator is not satisfied with the company’s remediation process.
NSW Independent Casino Commission chief commissioner Philip Crawford said on Monday he was specifically concerned with the culture of the business since the first Bell report.
In December, this masthead revealed the regulator was dissatisfied with the progress made to improve business practices and did not expect to reissue its licence when the special manager’s final term expires in June.
“I don’t think they’ll automatically regain their licence,” Crawford said in an interview on Monday. “If their licence is restored, it’ll be on the condition they operate under an independent monitor [as is the situation at rival Crown Sydney]. To date, they have not been at the level that we’d be comfortable with that.”
Revoking Star Sydney’s casino licence is one of several options that will be considered by the casino commission when it receives Bell’s progress report. Another is that it maintains its casino licence suspension and seeks cabinet approval to extend the tenure of the special manager for a fourth term.
The Star’s share price was above $3 before the original Bell inquiry commenced in 2022. Its market capitalisation has halved to $1.6 billion since then following the loss of its casino licences in the two states it operates in. Its woes have been further compounded by a complicated tax increase in NSW and increased cost of living pressures post-COVID-19.
The Star entered a trading halt on Monday ahead of the bombshell announcement of the second probe, but reopened trading on Tuesday. Its share price dived more than 20 per cent immediately after, trading 23.2 per cent lower at 43 cents shortly before 11am AEDT.
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Source: Thanks smh.com