To say casino operator Star Entertainment Group Ltd (ASX: SGR) is having a difficult time of late is an understatement.
Multiple government enquiries in the past year have accused the company of allowing money laundering at its venues. Those reviews raised doubts about Star Entertainment's fitness to hold casino licences in New South Wales and Queensland.
The share price has rightly more than halved over the past 12 months and a new chief executive has been installed.
As if that wasn't enough, this week the corporate regulator revealed it has been in Star's ear about its concerns.
Massive provision, massive loss
The Australian Securities and Investments Commission on Wednesday morning took credit for Star's revelation in its financial reporting that it had set aside $150 million for potential fines and penalties.
"Following a review of The Star's financial report for the year ended 30 June 2022, ASIC raised concerns that no provision had been recorded for likely fines and penalties — despite some uncertainties as to their amount — for non-compliance by The Star with Anti-Money Laundering and Counter-Terrorism Financing laws," stated the watchdog.
So that's $150 million that Star Entertainment now cannot touch, to ensure it has funds to cop whatever punishment arises out of the ongoing AUSTRAC investigation.
Star Entertainment reported a whopping $1.26 billion loss for the half-year ending 31 December.
According to ASIC, it warned the company as a part of its "financial reporting surveillance program".
"ASIC's financial reporting surveillance program aims to improve the quality of financial reporting and to ensure financial reports have been prepared in accordance with the law, supporting investor confidence and the integrity of Australia's capital markets."
There's a lot going on with Star shares
To add to its woes, a Hong Kong company with alleged associations to criminal gangs was revealed to have participated as an investor in the Star's $1 billion capital raising last week.
The Australian Financial Review aired the claim last weekend, calling it "a mark of desperation" or "shortsightedness".
The same publication revealed Tuesday night that Ord Minnett's part-owner Bruce Mathieson has been rapidly buying up the discounted shares in recent times.
"Mathieson's understood to have climbed to nearly 10% of Star's shares on issue, which is the most any investor can buy without clearance from casino regulators," reported the AFR.
"Ords did 70% of the Star volume on Tuesday – or nearly 10 times any other broker – and more than 50% on Monday."
