Star Entertainment Share Price Rises On “Important And Urgent Remedial Actions”
Robert D. Thompson
2 min read
Image source: Getty Images
The Star Entertainment Group Ltd (ASX:SGR) stock price rose on Tuesday.
In afternoon trading, shares of the struggling casino and resort operator rose more than 1% to $2.67.
What’s going on with the Star stock price?
Star’s share price rose on Tuesday after the company responded to the show cause notice from the NSW Independent Casino Commission (NICC). This relates to the report prepared by Mr Adam Bell SC (the Bell Report) which revealed that “extremely serious failures in governance, risk management and culture” had occurred at his Sydney casino.
According to the release, Star accepts the findings of the Bell report, including the finding of inadequacy. The company also recognizes the seriousness of the conduct that is raised in the report.
The company stressed that it had taken “significant and urgent corrective actions”, including an increase in risk, compliance and security personnel, the approval of surveillance technology upgrades as well as the permanent exit junkets and the closure of the Marquee nightclub.
It also undertakes to take the necessary and appropriate additional measures within specific deadlines to resolve the problems raised by the report. It is in the hope that the NICC “can be satisfied that The Star Sydney has taken sufficient action and is committed to taking further action, so that it may continue to hold its licence”.
Star also points out that it has made significant changes to its management. Noting that “the team that will lead us down the road to suitability will be very different from those that have led TSEG in the past.”
And after?
The future of Star Sydney now rests with the NICC.
It will decide whether or not to allow the company to continue to hold its license in due course. It could also fine the company over $100 million.
However, with Star’s stock price rising today, it looks like the market believes the company has potentially done enough to continue to hold its license.
Time will tell if this is the case.
