Star Entertainment Group’s shares have hit their lowest level in the company’s history, as executive chair David Foster and former boss Robbie Cooke prepare to front a gruelling inquiry into the casino operator’s culture.
The Star’s share price has been in a tailspin ever since its NSW casino licence was suspended in 2022. It dropped to just 41c on Monday, down 10 per cent over the past week, following a swathe of allegations raised by former and current executives and the group’s special manager, Nick Weeks.
The Star Entertainment Group’s Sydney premises. Credit: Bloomberg
So far, the company has been accused of falsifying mandatory welfare checks on poker machine players, failing to stop $3.2 million in cash going to gamblers who detected a fault in a gaming machine during a six-week period and forming a plot to then misconstrue that loss in the company’s half-yearly results in February.
Cooke, who quit last month, has also been accused of failing to be transparent about the group’s debt exposure and earnings position with the broader executive team. Meanwhile, Foster has been accused of proposing a class action against Weeks.
The company’s head of risk Scott Saunders, who formerly held similar roles at Westpac and Macquarie Bank, told the inquiry on Monday The Star was yet to complete a single cultural milestone that falls under its 631-point remediation plan. The company is just six months into its remediation plan.
The inquiry also heard that The Star’s head of transformation Nicola Burke, the executive most responsible for executing the remediation program, quit the business last month and is yet to be replaced.
“We need to slow down a little bit in order to have everything inbuilt properly. We’re turning out milestones and milestone closure memos quite quickly. My view is that some of what we’re doing ... we’re not landing fully in terms of driving change across our properties for the organisation. I think we have more work to do in our change management and admin activities,” Saunders said.
“I’ve never worked at an organisation that was under the pressure The Star’s under at the moment. It’s a very challenging environment, and it’s not getting easier.”
Burke on Monday told the inquiry she had actually left the casino operator last month, one week before Cooke and chief financial officer Christina Katsibouba, and less than one year after she had been promoted to the position.
She said she told Cooke in December that Weeks’ request to have a number of the company’s milestones assured by KPMG in December was not possible. The pair then wrote a joint letter back to Weeks in January to advise him of such. Burke admitted the tone of the letter was “strident”.
“ I knew that the one-month targets were not going to be achievable given the steps needed to be undertaken,” she said, explaining to the inquiry that it often took KPMG between two and six weeks to assure a single milestone and that she believed the company committed only to completing the milestones within that time period and not to have received the audit assurance by that period.
She admitted a number of the group’s objectives were behind schedule.
Adam Bell, SC, will determine whether The Star deserves to be deemed suitable to operate its flagship Pyrmont premises after the hearings have concluded next week. The inquiry was launched after the NSW Independent Casino Commission said it was not sure whether The Star has satisfactorily committed to overhauling its culture since the first inquiry in 2022 found the company to be a “case study of unethical conduct and cultural failure”.
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