What were the odds on a swift exit and a tax probe?
Boss of Ladbrokes owner times exit well as HMRC widens its investigation just three days after his departure ‘Not for the first time at GVC, there are more questions than answers’
You can get some great odds at Ladbrokes right now: 3/1 on the favourite Bal Mal to win today’s 13.05 race at Chepstow; 4/1 on Donald Trump to officially pardon himself during his first term; and 500/1 on Louis Theroux to be the next James Bond. But what odds would you have got on parent company GVC revealing it is the subject of an HMRC investigation just three days after the sudden departure of long-serving jockey Kenny Alexander?
The company said it was co-operating, so why did Alexander hang up his jodhpurs before the inquiry was announced to the stock market?
After all, the taxman’s probe centres on a deal that its long-serving chief executive was very much at the heart of, the one in 2017 where the bookie’s Turkish arm was gifted to a trio that included a friend he owned a stud farm in Ayrshire with. Not only that but GVC didn’t bother to disclose the relationship to investors.
Not forgetting of course that it was only last year that Alexander had said he would only leave if he was run over by a bus, which he wasn’t.
No, apparently lockdown prompted a change of heart and he wanted to spend more time with his family, so keen in fact that he left the very next day, even though presumably he’d spent the last few months stuck indoors with the rest of the Alexander clan.
So, it’s all a huge coincidence, and a very convenient one at that. The company says HMRC first started digging into the Turkish sale back in November last year but at the time it “understood” the focus of the investigation was “former third party suppliers” and “no GVC entity” was being looked at.
Presumably that explains why GVC chose not to tell the market at the time. It’s coming clean now because the tax authorities have expanded their investigation to examine “potential corporate offending”, a decision that the company was only notified of on Monday. Beyond that, HMRC is giving little else away, prompting GVC to complain that it is “disappointed by the lack of clarity”, an assessment that shareholders seem to agree with. If there’s one thing investors hate, it’s uncertainty and this announcement creates plenty of that, which probably explains why its share price tumbled 7pc on the news. Passing mention of section 7 of the Bribery Act won’t have helped either. Not for the first time at GVC, there are more questions than answers.
Robinhood delays its shot at UK
The decision of stock-trading app Robinhood to postpone its UK launch is a blow for a fledgling company with such a worthwhile ambition.
Founders Baiju Bhatt and Vladimir Tenev, a pair of Stanford University graduates, say their goal is “democratising finance for all”.
Even the name is emotive, the suggestion being that the “poor” are being handed the keys to a world dominated by the wealthy.
There is much to like about platforms like this. One of the biggest benefits of new technology is that finance has become much more accessible.
Apps like Robinhood have made it both cheaper and easier for the man on the street to dabble in the stock market regardless of experience.
But there is a dark side too. The typical customer is young – the average age is just 31. Bravado and naivety are in plentiful supply, which means steep losses are common.
The app’s strengths are also its weaknesses. Buying and selling stocks is simple and the experience is deliberately dumbed down. Users receive emoji notifications creating the feeling of being part of a game rather than playing with real money. Critics say it is no different to online gambling.
Investors can become confused about the true state of their financial position. In June, 20-yearold student Alex Kearns killed himself, in the mistaken belief that he had just lost $730,000, (£572,000) when in fact he was $16,000 in the black. The company says it is “refocusing efforts on strengthening our core business in the US”. If that means strengthening its systems and beefing up online checks and balances to make customers more aware of the risks involved, then that seems like a small price to pay for democracy.
New normal but same old menu
McDonald’s is on the verge of reopening 700 restaurants so we can all stuff our faces on double cheeseburgers and those seriously underrated mozzarella dippers. Coca-Cola says demand is recovering after a tough quarter.
Meanwhile, UK households spent an extra £24m on tea and coffee and an additional £19m on biscuits in the last four weeks. Forget the new normal, this is the return of the old normal. What a relief.