ladbrokes-owner-gvc-faces-probe

Ladbrokes owner GVC deals with probe by UK tax authority

21 July 2020

Ladbrokes owner GVC has said it is "shocked" the UK's tax body is broadening an inquiry into "potential business offending" associated with its former Turkish online betting unit.

It said HM Revenue & Customs had actually broadened its probe into providers GVC used in Turkey to consist of other entities within its group.

GVC sold its Turkish service in December 2017.
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The company said it was co-operating with investigation.
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GVC were of the development on Monday, however stated it had yet to be notified of which of its subsidiaries were being investigated.

It said it was "amazed by the choice to extend the investigation in this promotion code way and are disappointed by the absence of clearness supplied by HMRC as to the scope of its examination".
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"HMRC has not yet provided information of the nature of the historic conduct it is investigating, with the exception of a recommendation to area 7 Bribery Act 2010, nor has it clarified which part of the GVC group is under examination."

Section 7 states that a commercial organisation is guilty of an offence if a person related to that business bribes another person to acquire or maintain company, or to get or keep a benefit in the conduct of service.
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GVC's share price was down 10.6% to 778.2 p on Tuesday following the news.

The UK Gambling Commission told the BBC that it was "helping" with the investigation.

HMRC decreased to comment.

In July 2019, GVC was required to deny reports that it was still taking advantage of its former Turkish subsidiary, stressing that it no longer had ties with business.

"The board re-iterates the yohaig code truth that subsequent to the disposal of the group's Turkish-facing organization, GVC has no activity either directly or indirectly connected to the Turkish market," GVC said.

"Furthermore, the board also categorically refutes ideas that the group, or senior management, continue to benefit from any operations servicing the Turkish market."

Liz Coleman, former HMRC tax inspector and specialist of advisory firm Integrated Dispute Resolution, stated the examination might go on for a long time.

"HMRC examinations are generally prolonged and considering the size of GVC it might be going on for years, although if there's a targeted approach it might be much shorter," she said.

"They need to evaluate all the computer system records too, so this could include much more time."
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The HMRC's choice comes just a week after Kenneth Alexander revealed that he was stepping down as GVC's president.
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Mr Alexander took over in 2007 and oversaw the company's acquisitions of rivals Ladbrokes Coral and Bwin.party.
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GVC reported a 22% drop in total net profits for the 2nd quarter this year due to the impact of the Covid-19 pandemic.
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