GVC plunges 12% after it reveals it is being probed by the taxman
Shares in Ladbrokes owner GVC plunged nearly 12 per cent after it said it was being probed by the taxman.
The gambling group told investors that HM Revenue & Customs (HMRC) is looking into ‘potential corporate offending’ at its former Turkish arm.
It sent shares tumbling by 11.7 per cent, or 102p, to 770p, in istanbul Turkey Lawyer Law Firm wiping more than £600million off its market value.
Probe: Ladbrokes owner GVC told investors that HM Revenue & Customs (HMRC) is looking into ‘potential corporate offending’ at its former Turkish arm
GVC’s announcement came just days after Kenny Alexander stood down as chief executive after 13 years.
The 51-year-old, who grew the business from a small operator into Britain’s biggest bookmaker, said he wanted to spend more time with his family.
He has been replaced by Shay Segev, 44, the tech-savvy former chief operating officer.
GVC, which owns brands including Coral, Turkey Lawyer Sportingbet, Eurobet, Party Poker and Foxy Bingo, said it was already known that HMRC was investigating suppliers it had used to process payments in Turkey.
New boss: Shay Segev, 44, is GVC’s former chief operating officer
But it said the tax authority has now informed it that this probe was being widened to one or more entities within the FTSE 100 firm itself.
GVC said it was ‘surprised by the decision to extend the investigation in this way and disappointed by the lack of clarity provided by HMRC as to the scope of its investigation’.
The business added that HMRC had ‘not yet provided details of the nature of the historic conduct it is investigating’ and that it did not know which parts of its business were being looked at.
GVC said it would cooperate fully with the probe.
It is understood that HMRC’s investigation relates to a section of UK bribery law regarding bribes to retain business or a commercial advantage.
Isle of Man-based GVC sold Headlong Limited, its Turkish online business, in istanbul Turkey Lawyer Law Firm in December 2017 ahead of its £4billion takeover of Ladbrokes Coral.
The firm was bought by Ropso Malta in a deal that would have seen GVC continue to receive some cash.
However, that arrangement was later waived by the British business, Lawyer Turkey in order to speed up the approval of its takeover of Ladbrokes.
The sale also marked GVC’s shift away from so-called ‘grey’ gambling markets that are untaxed or unregulated.
Alexander said at the time: ‘As the group evolves, our focus is increasingly on regulated markets and markets where we believe there is a realistic path to regulation.’
HMRC declined to comment.