GVC share price falls as tax authorities widen investigation into former company

GVC Holdings has warned the City that HM Revenue & Customs (HMRC) has widened an investigation into its former online gambling operation in Turkey.

Shares in the parent company of Ladbrokes and Coral fell sharply following the announcement, which comes just a few days after the surprise news that chief executive Kenny Alexander was stepping down after 13 years in the role and was to be succeeded by Shay Segev.

In November last year GVC received an order for information from HMRC regarding its former Turkish business, which was sold in December 2017, which the company understood to involve a number of third-party suppliers relating to payment processing for online gambling.

The company said that before Monday it had understood "no GVC entity was a subject of HMRC's investigation".

However, it added in Tuesday morning's announcement: "HMRC yesterday informed the company that it was widening the scope of its investigation and is now examining 'potential corporate offending' by an entity (or entities) within the GVC group which HMRC has not yet identified."

GVC added it was "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".

The company said it had not been told details of the conduct under investigation, except for "a reference to section 7 Bribery Act 2010", nor was it clear which part of the group was under investigation.

"In the meantime, the company continues to co-operate fully with HMRC regarding the provision of information," GVC added.

The Gambling Commission said it was aware of the HMRC investigation.

A spokesperson for the regulator said: "We are aware of, and are assisting with, HMRC's ongoing investigation. We are monitoring developments but are unable to comment further at this stage."

GVC disposed of its operation in Turkey, where gambling is restricted, in order to clear the way for its acquisition of Ladbrokes Coral, but the company was subsequently forced to defend the circumstances of the deal.

Shares in GVC closed on Tuesday at 770p, down by nearly 12 per cent.

Read more:

Betting titan Kenny Alexander departs GVC to usher in new era

GVC reduces number of betting shop closures after "game of poker" with rivals

Shareholder revolt: anger over executive pay at Ladbrokes Coral owner GVC

Ladbrokes Coral owner reports £50m-a-month hit from coronavirus outbreak

Members can read the latest exclusive interviews, news analysis and comment available from 6pm daily on racingpost.com