HMRC Broadens Inquiry Into GVC Holdings Turkish Subsidiary

GVC Holdings reported that HM Revenue & Customs (HMRC) has broadened its inquiry into the former online subsidiary of the company in Turkey.

The inquiry, which started on 28 November 2019, was conducted in conjunction with former third-party vendors, which the operator understood to be linked to the processing of online gambling payments in Turkey.

GVC was forced to sell its Turkish business subsidiary ‘Headlong Limited’ in 2017, while the firm pursued its £ 4bn takeover of the larger Ladbrokes Coral Plc business.

GVC Governance, issuing a CMA statement, reported that it had relinquished any payment for its Turkish asset, absorbing €46 million in costs to close its operations, having previously agreed to a €150 million deal with private investor ROPSO Malta.

On 20 July, HMRC told GVC that the inquiry will be extended and that it will ‘now examine potential corporate offending committed by an entity (or entities) within the GVC group which HMRC has not yet identified’, citing section 7 of the 2010 Bribery Act, which includes corporate organisations’ inability to prevent corruption.

It was especially troubling for the company because it was known that prior to that date no GVC individual had been the target of HMRC ‘s investigation. In the vague terms of the investigation GVC has since shared its frustration.

A statement read: “Both the Company and GVC are 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.

“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. In the meantime, the Company continues to cooperate fully with HMRC regarding the provision of information.”

HMRC’s announcement came a week after long-time CEO Kenny Alexander stood down abruptly to be replaced by Company COO Shay Segev.