GVC un­der in­ves­ti­ga­tion amid claims of bribery

Lad­brokes owner in the spot­light as tax­man widens in­quiry into its for­mer Turk­ish on­line busi­ness

The Daily Telegraph - Business - - Business - By Si­mon Foy and Oliver Gill

GVC, the Lad­brokes owner, is be­ing in­ves­ti­gated by the tax­man over bribery claims at its for­mer Turk­ish on­line gam­bling busi­ness.

Al­most £374m was wiped off the value of the FTSE 100 firm af­ter it re­vealed that HMRC had widened an in­ves­ti­ga­tion pre­vi­ously fo­cused on some sup­pli­ers to in­clude parts of the book­maker it­self.

The an­nounce­ment comes just days af­ter the sud­den de­par­ture of boss Kenny Alexan­der.

GVC bosses said the firm learned it was in HMRC’s sights on Mon­day. It had pre­vi­ously known about an in­ves­ti­ga­tion into sup­pli­ers re­lat­ing to pro­cess­ing of pay­ments for on­line bet­ting in Turkey.

Of­fi­cials or­dered the firm to hand over de­tails about its Turk­ish arm last Novem­ber. It sold the oper­a­tion in De­cem­ber 2017 be­fore a £4bn merger with Lad­brokes Co­ral. The com­pany did not pub­licly re­veal this re­quest from HMRC un­til yes­ter­day.

The UK’s big­gest book­maker said it was sur­prised by the de­ci­sion to broaden the in­ves­ti­ga­tion, and dis­ap­pointed by a lack of clar­ity from HMRC.

GVC said: “HMRC has not yet pro­vided de­tails of the na­ture of the his­toric con­duct it is in­ves­ti­gat­ing, with the ex­cep­tion of a ref­er­ence to Sec­tion 7 of the Bribery Act 2010, nor has it clar­i­fied which part of the GVC group is un­der in­ves­ti­ga­tion.”

HMRC de­clined to com­ment. Penal­ties un­der Sec­tion 7 of the Bribery Act can in­clude an un­lim­ited fine.

The com­pany’s for­mer Turk­ish busi­ness was con­tro­ver­sial be­cause on­line gam­bling is il­le­gal in the coun­try. GVC earned rev­enues from Turk­ish cus­tomers un­der its Malta li­censes, mak­ing £100.3m from the oper­a­tion in 2016.

There was fur­ther con­tro­versy when Mr Alexan­der was forced to de­fend re­ports that he off­loaded the Turk­ish firm for noth­ing in 2017 to a busi­ness as­so­ciate

‘HMRC has not yet pro­vided de­tails of the na­ture of the his­toric con­duct it is in­ves­ti­gat­ing’

with whom he owned a stud farm, with­out in­form­ing in­vestors about the con­nec­tion. GVC de­nied any wrong­do­ing but ad­mit­ted the com­pany “could pos­si­bly have been a lit­tle bit clearer” about the ties.

An­a­lysts at Shore Cap­i­tal said the news would make it hard for in­vestors to buy shares un­til there is clar­ity.

Mr Alexan­der, who trans­formed the busi­ness from a gam­bling min­now to one of Bri­tain’s big­gest op­er­a­tors, re­tired last Fri­day say­ing he wanted to spend more time with his fam­ily af­ter 13 years at the helm.

The GVC boss told The Daily Tele­graph in March that he had no in­ten­tion of step­ping down. An­a­lysts at Jef­feries said they did not think the an­nounce­ment of the in­ves­ti­ga­tion was linked to Mr Alexan­der’s re­tire­ment.

GVC said it con­tin­ued to co-op­er­ate fully with HMRC.

Kenny Alexan­der has re­tired as GVC boss

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