GVC Holdings confirmed that it is being investigated by the UK tax authority.
Today, GVC Holdings revealed that it is currently under investigation by Her Majesty’s Revenue and Customs (HMRC) over “potential corporate offending” by one of its subsidiary companies, in relation to its former operations in Turkey.
The UK tax authority informed GVC yesterday, that it had widened the scope of an investigation launched in November 2019. HMRC has yet to inform the operator which subsidiary or subsidiaries are being investigated.
The initial investigation
The investigation, which began on 28 November 2019, was launched in relation to the operator’s former third-party suppliers, which GVC understood to be related “to the processing of payments for online gambling in Turkey.”
In 2017, GVC was forced to sell its Turkish subsidiary, Headlong Limited, as the operator was pursuing its £4bn takeover of Ladbrokes Coral.
After issuing a CMA filing, GVC’s governance said it had relinquished any payment for its Turkish asset, absorbing the costs of €46m to cease operations. Prior to this, the operator agreed a €150m sale with a private investor, ROSPO Malta.
HMRC widens investigation
Yesterday, HMRC informed the operator that the investigation would be widened and would now be “examining potential corporate offending by an entity (or entities) within the GVC group which HMRC has not yet identified.”
HMRC cited section 7 of the Bribery Act 2010 which covers the failure of corporate entities to prevent bribery. Under section 7 of the act, a commercial entity is guilty of an offence if a person associated with the company bribes another individual to obtain or retain businesses, or to secure an advantage in its business.
Prior to this, the operator understood that HMRC’s investigation was directed at a number of former third party suppliers, relating to the processing of payments for online gambling in Turkey.
Since HMRC widened its probe, the operator said it is “disappointed” with the lack of clarity provided by the tax authority.
In a statement, GVC Holdings said: “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.”