GVC under investigation amid claims of bribery
Ladbrokes owner in the spotlight as taxman widens inquiry into its former Turkish online business
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