Star warns AUSTRAC's $272 million fine could trigger bankruptcy
Embattled Australian 바카라 operator The Star Entertainment Group has reportedly warned that a proposed A$400 million ($272 million) fine from the nation’s financial crimes watchdog could push the company into bankruptcy. The operator said that any fine by the Australian Transaction Reports and Analysis Centre (AUSTRAC) over A$100 million will put the company’s “ability to survive as a business is in serious doubt.”
Fine over A$100 million will hamper Star’s ‘ability to survive’
The warning was reportedly issued by Star’s representative Steven Finch during closing submissions to the Federal Court, amid AUSTRAC’s ongoing anti-money laundering (AML) enforcement action. Finch said that A$100 million fine would already be a stretch, describing it as “all the money that we have and reasonably anticipate being able to borrow.” This comes as the AUSTRAC seeks the penalty after The Star secured a A$300 million ($176 million) rescue package from United States-based 바카라 business Bally’s Corp, and Australian conglomerate Investment Holdings Pty Ltd. The financial crimes watchdog highlighted the capital injection in closing statements to the court.
This deal became a top priority for Star Entertainment after a failed attempt to refinance nearly AU$1 billion in debt. The strategic investment will see Bally’s contribute A$200 million and Bruce Mathieson’s Investment Holdings invest A$100 million in the operator. Previously, the arrangement was that Bally’s would invest at least A$250 million of the total amount. The Star urged its shareholders to “unanimously recommend” the rescue package. However, shareholders are scheduled to vote in a general meeting on 25 June.
Comparisons to Crown Resorts
Finch pushed back against comparisons to Crown Resorts, which settled for an AU$250 million fine in a similar case. He argued that unlike Crown, “a much larger organisation,” The Star lacks is not in the financial state to absorb such penalties without facing collapse. “That penalty was agreed at a rate which would not result in the insolvency of Crown, which was a very much larger organisation. Whereas here, if one had a fine which was a small amount less than that, we say the evidence is that it would be insolvency,” said Finch, as cited by the .
However, AUSTRAC remains firm in its stance. In response, its representative Simon White said, “Unlike Crown, Star had the benefit of seeing the Bergin Inquiry… and still did nothing.” This was said as White referenced the first AML investigation, focusing on Crown Resorts.
In April-end, The Star swung to an operating loss in the third quarter. The loss was attributed to declining foot traffic, ex-Tropical Cyclone Alfred and tighter gambling regulations. For the quarter, Star reported a loss in earnings before interest, taxes, depreciation and amortisation (EBITDA) of A$21 million. The of A$271 million for the third quarter—a drop of 9 percent from the December quarter, and a 35 percent drop year-on-year.
