Star avoids revolt as it vows to lift game
THE Star Entertainment Group has avoided a second shareholder strike and board spill motion as it promised to bolster its standards.
At the company’s general meeting on Thursday, an overwhelming 97.5 per cent of proxies and shareholders voted in support of the company’s remuneration report, even as recent media allegations of money laundering at its Sydney and Queensland casinos have placed the company in regulator crosshairs.
It is a stunning reversal of last year’s AGM, when almost half of all shareholders rejected the remuneration report. It is also a show of support for the company, as it prepares to face the music over claims it courted high-rollers with links to organised crime while sitting on two independent reports from KPMG in 2018 that detailed flaws in its antimoney-laundering systems.
Labelling the KPMG claim “incorrect”, Star chairman John O’Neill told shareholders the company was committed to compliance and welcomed increased regulatory scrutiny of the casino industry. Star shares rose 2c to $3.65 on Thursday but are still 14 per cent below where they were trading before the allegations earlier this month.
Mr O’Neill reiterated Star’s insistence that the recommendations of the KPMG reports were implemented, and its commitment to work with regulators.
“The Star initiated a program to address all recommendations from the review. That program of work was conducted from mid-2018 to early 2020,” he said.
Chief executive Matt Bekier said he would work on improving Star’s financial performance so it could return to paying dividends, after it was affected by Covid-19, resulting in a $37m total loss during the last two years.
Central to the plan is Star’s “capital light strategy” that saw it spin off its Brisbane casino and hotel buildings in a $250m sale and leaseback deal earlier in the week.
“We are also exploring the potential for a sale and leaseback, or similar transaction, of The Star Sydney property,” Mr Bekier said.
Asked whether Star’s growth plan would include reviving an abandoned $12bn merger proposal with Crown Resorts, Mr O’Neill said: “We remain open to exploring potential value-enhancing opportunities should they arise in the future.”
Shareholders were told that activity at Star’s Sydney casino was “encouraging” following its reopening this month after lockdowns, while revenue at the Queensland properties were tacking in line with last year. Mr Bekier said “all properties will benefit from the planned reopening of domestic and international borders”.