HMRC expands investigation into GVC over former Turkish subsidiary
The British tax authorities have widened their investigation into GVC Holdings' former Turkish online subsidiary, to examine “potential corporate offending.”
GVC’s share price has also tumbled this morning, starting at £8.71 ($11.06) and falling to £7.61.
The operator announced it was informed on 20 July an investigation by Her Majesty’s Revenue and Customs (HMRC) has been expanded, after initially being launched in November 2019.
The November investigation was understood to be directed at a number of former third-party suppliers, relating to the processing of payments for online gambling in Turkey, with no GVC entity subject to the inquiry.
However, the scope has now been widened to examine any potential wrongdoing, although the operator said HMRC has failed to provide details of the investigation, including which part of GVC is under examination, other than referencing section 7 of the Bribery Act 2010.
The act states that a commercial organisation is guilty of an offence if a person associated with it bribes another person intending to obtain or retain an advantage in the conduct of business.
GVC sold its Turkey-based subsidiary Headlong Limited to Ropso Malta Limited in November 2017 for a performance-related earn-out of up to €150m ($171.6m), payable over five years, which was later waived ahead of GVC’s acquisition of Ladbrokes Coral.
GVC said it was “surprised by the decision to extend the investigation in this way” and is “disappointed by the lack of clarity provided by HMRC” but will fully co-operate with the authorities.
Last week, GVC CEO Kenny Alexander announced his retirement from the board, being replaced by COO Shay Segev.
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