Plot thickens over bid for Star after Hard Rock denies involvement
The Brisbane developer using the Hard Rock name to launch a bid for Star Entertainment has reportedly been sent cease and desist notices from the Florida-based owner of the brand.
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The Brisbane developer using the Hard Rock name to launch a bid for troubled casino operator Star Entertainment has declined to comment on claims he has been sent “cease and desist” notices from the Florida-based owner of the brand.
Patrick Farrugia, 63, who lives in a $12m mansion in the leafy Brisbane suburb of Clayfield, said on Wednesday that his companies had “long standing arrangements with Hard Rock International across agreed territory jurisdictions”.
Star shares soared more than 20 per cent on Monday after news that a company called Hard Hotels and Resorts (Pacific) was part of a consortium bidding for the casino group.
Hard Rock International later denied any involvement in the bid and threatened to take legal action for unauthorised use of its name. Star shares dropped 3 per cent to 48.5c on Wednesday.
It is understood Mr Farrugia has been the recipient of cease and desist letters from Hard Rock International about using its name without authorisation.
Mr Farrugia did not respond to a request for comment on Wednesday on those claims, first reported in Inside Asian Gaming, and instead directed inquiries to law firm Mills Oakley.
He reiterated claims that his companies – HRH Pacific and HRH Australia – had confidential agreements with Hard Rock International.
Star, which originally told the ASX that Hard Hotels and Resorts (Pacific) was a local partner of Hard Rock, declined to comment on whether it should have done more due diligence on the company’s reported links with Hard Rock International.
Mr Farrugia’s links with Florida-based Hard Rock appear to be limited to his involvement as an investor in the now defunct Hard Rock Cafe in Surfers Paradise.
The giant guitar outside the venue famously burst into flames in 2004 due to an electrical fault.
David Vincent, the former general manager of the venue, is also listed as a director on the board of HR Pacific.
Hard Hotels and Resorts (Pacific), which is purportedly the vehicle making a bid for Star as part of a consortium, is not registered in Australia.
Mr Farrugia is an investor in several hotel projects as a director of MP Pacific Investments, which in 2007 purchased the Wave Motel in Byron Bay for $19.5m.
He also developed Oaks on Lonsdale in Melbourne before it was sold by receivers PPB to a Hong Kong group in 2014.
Analysts said any takeover bid for Star would be complex and uncertain given the possible loss of its Sydney casino licence following the Bell II inquiry.
Adam Bell, SC, is conducting his second inquiry into Star’s suitability to hold a casino licence in Sydney, following a probe in 2022 that found it had not met its obligations to prevent money laundering and other misconduct.
The Star’s casino licence in Sydney was suspended indefinitely in 2022 and is now under the control of regulator-appointed manager Nicholas Weeks.
Mr Bell will report later this year to the NSW Independent Casino Commission (NICC).
The inquiry heard on Wednesday that Star would not be in a fit state to keep its Sydney casino licence even if conditions were placed on the licence. In closing submissions, counsel assisting the inquiry Caspar Conde said Star was “not presently suitable regardless of any proposal in relation to licence conditions or the manager (continuing to supervise the company)”.
Mr Conde also hit back at earlier testimony from Star that the inquiry should not be looking at “clear and convincing evidence” of suitability despite that being a requirement in the NSW Casino Control Act.
“The Star entities invite you to consider suitability by reference to hypothetical licence conditions that are a matter for the NICC, but at the same time they say that if you were to bring a test of clear and convincing evidence then you would be committing error,” Mr Conde said.
“We say that there is no basis in the evidence to discern a future time by which the inquiry can be satisfied that the Star will or is likely to become suitable.”
Mr Conde denied suggestions that text messages between former Star chair David Foster and CEO Robbie Cooke had been taken out of context when they talked about war with the regulator. Mr Foster resigned from his position after allegations at the inquiry he and Mr Cooke spied on Mr Weeks and were “preparing for war” with the regulator.
“These messages were inappropriate, and suggested a perception of the NICC and Mr Weeks as adversaries who were attacking or assaulting Star,” said Mr Conde. “It revealed a mindset of being suspicious, fearful and possibly defiant, adopting a foolish and counter-productive manner. There were some references in the oral submissions to Mr Cook being like a wartime president. Picking up on that analogy, the problem is that Mr Cook regarded the NICC as an enemy.”
Mr Conde said Mr Foster, who continues to serve as interim CEO of Star, will be departing “relatively soon”.
Originally published as Plot thickens over bid for Star after Hard Rock denies involvement
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