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The Star Entertainment Group (ASX: SGR) has passed a major hurdle towards running a casino within its joint venture development Queen's Wharf in Brisbane, after Queensland Attorney General Yvette D’Ath gave its Hong Kong partner Chow Tai Fook Enterprises (CTFE) the all-clear.
CTFE and another Hong Kong-based group, Far Eastern Consortium, each hold a 25 per cent stake in the Destination Brisbane Consortium that holds The Star Brisbane casino licence, with The Star owning the other 50 per cent of the joint venture.
The Attorney General, who plans to quit politics at the next state election that is likely to be held in October, was leading a review into CTFE's suitability given its alleged links to organised crime.
"The suitability review found that there is insufficient evidence to conclude that CTFE or its relevant associates are unsuitable," The Star reported in an announcement to the ASX after the market closed yesterday.
The former Attorney General and Minister for Justice had, in 2022, directed the Office of Liquor and Gaming Regulation (OLGR) to investigate Chow Tai Fook following media allegations the company was "associated with a person of poor repute, and who was arrested in Macao and later convicted there for significant fraud perpetrated against the Chinese government".
"That association was said to arise because (among other reasons) CTFE and the relevant person each held an interest (although not directly) in a casino project in Vietnam," the Queensland Government report said.
The report noted considerable investigative work was undertaken between October 2022 and February 2024 with the assistance of an external private firm specialising in financial investigations.
"A finding of unsuitability is a serious matter with grave consequences. Consequently, any allegations must to be supported by probative material and evidence," the report said.
"The Attorney-General determined, with the benefit of further advice from King’s Counsel, that the evidence fell short of establishing that CTFE knew that the relevant person was a person of poor repute during the period of the association.
"The allegation that the relevant person was of poor repute during this period lacked probative value given it was based on suspicion, rumour, and hearsay.
"On that basis, the investigation did not substantiate any motive for CTFE to intentionally conceal that business association from OLGR."
The Attorney General has noted the Hong Kong group's apology and assurances about future communication with the regulator.
"CTFE has become very forthcoming with sharing information and cooperating with the regulator and has committed to amending their business practices to align with expectations of the regulator," the report said.
"The findings come with a number of actions to remediate CTFE’s dealings with OLGR and to keep under close scrutiny the suitability of CTFE and its associates going forward.
"Failure by CTFE to meet its duty to cooperate would bear upon CTFE’s ongoing suitability and may render CTFE liable to criminal sanction."
SGR shares rose 6.1 per cent today to reach 43.5 cents per share.
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