Ladbrokes owner GVC faces probe by UK tax authority
21 July 2020
Ladbrokes owner GVC has said it is "stunned" the UK's tax body is expanding a query into "possible business angering" related to its previous Turkish online gambling system.
It stated HM Revenue & Customs had actually broadened its probe into suppliers GVC utilized in Turkey to include other entities within its group.
GVC offered its Turkish service in December 2017.
The business said it was co-operating with investigation.
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GVC were notified of the advancement on Monday, but stated it had yet to be notified of which of its subsidiaries were being investigated.
It said it was "shocked by the choice to extend the investigation in this promotion code method and are dissatisfied by the lack of clearness provided by HMRC as to the scope of its investigation".
"HMRC has not yet offered information of the nature of the historical conduct it is investigating, with the exception of a reference to area 7 Bribery Act 2010, nor has it clarified which part of the GVC group is under investigation."
Section 7 states that a business organisation is guilty of an offence if a person connected with that business bribes another individual to acquire or keep service, or to obtain or keep an advantage in the conduct of organization.
GVC's share cost 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 examination.
HMRC decreased to comment.
In July 2019, GVC was forced to reject reports that it was still taking advantage of its former Turkish subsidiary, worrying that it no longer had ties with the business.
"The board re-iterates the truth that subsequent to the disposal of the group's Turkish-facing organization, GVC has no activity either directly or indirectly linked to the Turkish market," GVC said.
"Furthermore, the board likewise unconditionally refutes suggestions that the group, or senior management, continue to benefit from any operations servicing the Turkish market."
Liz Coleman, previous HMRC tax inspector and expert of advisory company Integrated Dispute Resolution, said the investigation could go on for a long time.
"HMRC examinations are typically lengthy and thinking about the size of GVC it could be going on for several years, although if there's a targeted approach it might be shorter," she said.
"They have to analyse all the computer system records too, so this could include much more time."
The HMRC's choice comes just a week after Kenneth Alexander announced that he was stepping down as GVC's primary executive.
Mr Alexander took control of in 2007 and manage the company's acquisitions of rivals Ladbrokes Coral and .
GVC reported a 22% drop in total net incomes for the 2nd quarter this year due to the impact of the Covid-19 pandemic.
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