A class action has been filed on behalf of investors in the Star Entertainment Group amid a damning public inquiry into the group's casino operations in Sydney.
The investors are seeking compensation for misleading or deceptive representations that Star made about its compliance with regulatory obligations.
Their lawsuit comes during a royal commission-style public inquiry into Star's fitness to hold its casino licence in Sydney, after media reports of "suspected money laundering (and) organised crime".
The class action alleges Star led investors to believe the group was a model casino operator when, in reality, it was failing to mitigate corruption, money laundering and bribery.
In response to 2021 media reports about Star's misconduct, the company's share price declined by more than 25 per cent, wiping more than $1 billion from the company's value.
Slater and Gordon — who is bringing the class action in the Supreme Court of Victoria — said investors had a strong case to recover their losses.
"When investors purchase shares in a listed company, they are entitled to assume that all of the material information relevant to its financial position had been disclosed to the market," class actions senior associate Ben Zocco said.
"Star insisted that it took compliance seriously and ran its business ethically, honestly and with integrity. Our investigations, to date, in addition to the extraordinary evidence revealed so far in the [inquiry], suggests that they did everything but."
Lead plaintiff David Lynch said he was disappointed to see the value of his shareholding fall so significantly and felt Star had been deceptive about its company values.
"As an investor, I expect that licensed operators that are publicly listed will operate in accordance with the law, and that there are appropriate checks and balances to ensure they do so," Mr Lynch said.
"I am dismayed by the apparent scale of Star's misconduct that is now being revealed in the public hearings."
Yesterday, Star Entertainment Group chief executive and managing director Matt Bekier resigned from the company's board, effective immediately, claiming he wanted to take "responsibility" about the misconduct uncovered at the inquiry.
Adam Bell, SC, who is leading the inquiry, has so far heard evidence that a secret junket room was set up at the casino, senior managers turned a blind eye to money laundering risks and misled the Independent Liquor and Gaming Authority and the National Australia Bank.
On Tuesday, the inquiry was told Star Casino used the bank account of a junket operator to accept payments from gamblers who had money in China.
Star's general manager of finance and commercial, Michael Whytcross, said Macau-based accounts used by the casino to accept payment from gamblers with money in China were shut down in 2017 after a crackdown on money leaving the mainland.
A workaround was established with help from a junket operator named Kwan Koi, who had bank accounts in Macau.
"Kwan Koi would have funds in Australia, if there was someone wanting to repay [their casino debts] in Macau, then the Star sales team would refer them to Kwan Koi," Mr Whytcross explained.
"Then Kwan Koi would accept cash payment and subsequently transfer funds or make funds available in Australia to repay that debt."
Mr Whytcross said many millions of dollars were transferred this way.
"I understand it was multiple millions per month," he said.
"Does it sound about right to you that, in the period September 2018 until July 2019, $76 million Australian went through," counsel assisting Naomi Sharp SC asked Mr Whytcross.
"No that wouldn't surprise me," Mr Whytcross replied.
The inquiry continues.
