GVC to “cooperate fully” with probe by UK authorities
The owner of Ladbrokes and Coral is being investigated by HMRC in connection to a former Turkish subsidiary.
UK.- The gambling giant GVC, which owns Ladbrokes, Coral and Gala, is facing an investigation by HM Revenue & Customs (HMRC) over “potential corporate offending” by its former online gambling subsidiary in Turkey, Headlong Limited.
The news sent GVC’s shares plummeting by 102p, almost 12 per cent, to 770p.
GVC said it was surprised to learn it was under investigation.
HMRC began an investigation last November which led to GVC handing over information on its former Turkish subsidiary, but until now the company believed HMRC was only investigating its third-party payment processing suppliers in Turkey, not the company itself.
The company says it has not been told why it is under investigation, other than a reference to section seven of the Bribery Act 2010, which refers to failures to prevent bribery in all territories where a UK firm does business.
A spokesperson for GVC said: “Both the company and GVC are surprised by the decision to extend the investigation in this way and are disappointed by the lack of clarity provided by HMRC as to the scope of its investigation.
“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 Bribery Act 2010, nor has it clarified which part of the GVC group is under investigation.
“In the meantime, the company continues to co-operate fully with HMRC regarding the provision of information.”
GVC divested its Turkish subsidiary to Ropso Malta in December 2017 before its £3.6billion acquisition of Ladbrokes Coral due to concerns from lenders about the company operating in a country where online betting is illegal.
Ropso Malta previously provided IT services to GVC’s Turkish operation. Its investors include GVC’s former CEO Kenny Alexander, who left the company last week after 13 years.
GVC eventually waived a €150million earn-out fee that was to be paid monthly over five years in order to avoid regulatory delays to its Ladbrokes Coral acquisition.
GVC said it had provided information on its Turkish business to HMRC last year after being ordered to do so.
