GVC Holdings PLC, which owns a number of popular UK bookmakers and betting brands such as Ladbrokes, Coral, Sportingbet, Bwin and Party Poker, have stated that Her Majesty’s Revenue and Customs (HMRC) is widening their enquiry into “potential corporate offending” which relates to its former Turkish online gambling operations. HMRC originally launched an investigation in November 2019 but revealed on Monday 20th July that they would be widening their examination to the surprise of GVC.
Monday’s news impacted GVC’s share price dramatically and resulted in a 14% drop on Tuesday. As well as the share drop, GVC have stated that it saw a 22% decrease in total net revenue for Q2 in 2020 due to the impact of the worldwide pandemic.
GVC said they were “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”.
Although GVC were notified of the widened investigation on Monday, they said that they were yet to be told which subsidiaries were being investigated.
“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.”
Bribery Act 2010 – Section 7
Section 7 of the Bribery Act 2010 includes:
A relevant commercial organisation (“C”) is guilty of an offence under this section if a person (“A”) associated with C bribes another person intending either to obtain or retain business for C, or to obtain or retain an advantage in the conduct of business for C.
Just a week prior to the announcement of further investigation, GVC Chief Executive Kenneth Alexander stepped down from his role of which he occupied since 2007 and played a part in the companies acquisitions of Ladbrokes Coral as well as Bwin Party.
GVC sold its business in Turkey in December 2017 but following media reports, were forced to deny reports it was still benefiting from its Turkish subsidiary and stressed that ties had been cut with that part of the business.
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