We are banned from telling you something crucial about Star’s so-called saviour
On the morning of October 11, 2021, the Herald published a story that set off a world of woe for the Star Entertainment group. Just three-and-a-half years later, the casino giant is teetering on the brink of collapse.
The story by the Herald’s investigative reporter Nick McKenzie and the now executive producer of the 7.30 program, Joel Tozer, revealed Star had been enabling suspected money laundering, organised crime, large-scale fraud and foreign interference within its Australian casinos for years, even though its board was warned its anti-money-laundering controls were failing.
An 11th-hour deal to save the Star Entertainment Group raises as many questions as it answers.Credit: Brent Lewin
“Star Entertainment has portrayed itself as the cleanskin casino company compared to its rival, Crown Resorts, whose reputation has been shattered by the findings of two royal commissions and a regulator’s investigation,” Nick and Joel wrote.
“But an investigation by The Sydney Morning Herald, The Age and 60 Minutes has confirmed that Star has engaged in many of the same improper practices while escaping the withering public examinations faced by Crown’s executives and key shareholder James Packer.”
This was journalism at its finest. It exposed corporate wrongdoing, uncovered extraordinary criminal activity, and embarrassed regulators who had been asleep at the wheel during all of it.
With the cat out of the bag, Star’s dirty laundry was subsequently aired in two damning public inquiries. The first probe stripped Star of its licence to operate a casino in Sydney (a state-government-appointed manager was tasked with oversight of casino operations as a result). That arrangement was extended last year when it was clear Star had not done enough to clean up its act on governance, regulatory compliance, technology and risk management.
When the Herald’s investigation was first published, Star’s share price hovered at a little over $3. Stock was worth just 11 cents earlier this week when trading was suspended by the ASX because Star’s board has not been able to sign off on its latest accounts.
Star is out of cash and rapidly running out of options for a lifeline.
On Friday afternoon, the company may have clinched a deal to sell its half stake in a sprawling new casino and entertainment complex in Brisbane. Under the arrangement, Star’s joint partners in the so-called Queen’s Wharf project - Chow Tai Fook Enterprises and Far East Consortium - would take full control, giving Star enough money to avoid administration this week.
However, there are real questions over whether such a deal guarantees Star’s survival, and whether Chow Tai Fook Enterprises (CTFE) should take control of the Brisbane casino.
As the Herald’s investigative reporter Harriet Alexander wrote last year, CTFE is a multibillion-dollar conglomerate owned by the Chengs, one of the wealthiest families in Asia, and operates a lengthy portfolio of jewellery, hotel, transport and casino businesses across the world. In Australia, it owns Alinta Energy and Victoria’s Loy Yang B power station.
Last year, CTFE – supported by the then Queensland Labor government – took the Herald to court to prevent us from publishing exclusive details of a bombshell leaked probity report into CTFE and its links to jailed “junket king” Alvin Chau.
The Queensland government waved through CTFE as a suitable casino operator in May, declaring the evidence did not substantiate that the company had deliberately concealed its relationship with Chau.
The Herald planned to reveal new details about that probity report but was prevented from publishing via a Queensland Supreme Court injunction.
This has left the Herald in a frustrating position. We have information about Star’s potential saviour which we believe should be in the public domain but are prevented from doing so. In light of Star’s mooted deal with CTFE, governments and regulators should be asking about this report.
As the Herald’s business columnist Liz Knight observed on Friday, Star’s survival circus has moved from unusual to absurd. Couldn’t have said it better myself.
The Herald takes no glee in Star’s troubles. The casino giant employs thousands of good people who are fearful for their jobs and futures. Some 3000 of Star’s 9000 staff are tied to the Pyrmont casino. They do not deserve to be punished for the failings of management, board members and regulators, but will inevitably bear the brunt of any collapse.
My thoughts are with them during what must be a truly awful time.
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