Star's Hong-Kong saviour concealed ties with criminal junket king
One of Star Entertainment’s two major Hong Kong-based investors, Chow Tai Fook Enterprises (CTFE) has come under scrutiny for its concealed relationship with criminal junket operator, local media has reported. The company has recently been at the center of a Queensland government investigation concerning its relationship with convicted criminal junket operator, Alvin Chau.
In 2023, the Queensland government launched an enquiry into Chow Tai Fook’s connections with Alvin Chau’s Suncity operation. The government’s suspicions were fueled by reports that Chow Tai Fook had not fully disclosed its relationship with Chau, particularly concerning a casino in Vietnam.
Report recently released
The findings of the enquiry were initially kept confidential after Chow Tai Fook successfully obtained an injunction preventing the media from publishing the report. However, the report was released recently by the Crisafulli government, it shed light on the company’s alleged attempts to conceal its ties to the criminal operator by providing incorrect information to regulators in 2022. In 2021, Chau was arrested and sentenced to 18 years in prison for illegal gaming and organised crime
According to the report, Chow Tai Fook misled regulators by claiming that it had sold its stake in the Vietnamese casino to a company called Alpha Era. In reality, the company had sold half of its interest in the casino to Star Admiral, a business owned by Chau. Furthermore, Chow Tai Fook continued to provide loans to Alpha Era, which had direct links to Chau and Suncity. The report revealed that between 2020 and 2022, Chau indirectly held an indirect equity interest in the Vietnamese casino through his Suncity operation.
In response to the findings, Chow Tai Fook’s chairman, Henry Cheng, denied any intentional wrongdoing. He stated that the information provided to the regulators was not deliberately misleading, suggesting that any errors were the result of communication issues within the company. The company also emphasised its commitment to developing the Queen’s Wharf project and its ongoing cooperation with Queensland’s gaming regulator.
About the investors and other proposals
Chow Tai Fook Enterprises and Far East Consortium are two major investors in Star Entertainment, particularly involved in the development of the Queen’s Wharf casino in Brisbane. This project is crucial for Star’s future, as it has struggled with declining revenues and increasing scrutiny from regulators. This agreement will see the Hong Kong partners paying A$53 million ($33.4 million) for Star’s stake in the Brisbane project, Far East said in a filing on the Hong Kong Exchange (HKEX). The first payment of A$35 million was to be made on 7 March.
Star recently gave Salter Brothers, its suitor, until the end of March to complete due diligence and agree to a crucial $750 million rescue package. The offer comes at a time when the casino giant teeters on the edge of collapse for the second time in just a month. Steve McCann, the CEO of Star Entertainment, has been in talks with various potential investors since early March. These include Star securing a A$250 million bridging facility with U.S. hedge fund King Street Capital Management.
