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GVC shares drop on HMRC probe

The gambling operator sold its Turkish-facing business in 2017
GVC shares drop on HMRC probe

GVC Holdings (GVC) shares fell 9 per cent after the gambling operator revealed that it had become the subject of an investigation by UK tax authorities.

IC TIP: Hold at 790p

The owner of Ladbrokes Coral disclosed that in November 2019, HMRC had asked its UK subsidiary for information regarding its former Turkish-facing business, which GVC sold in 2017. GVC previously understood that HMRC’s investigation was focussed on a number of former third party suppliers, linked to the processing of online gambling payments in Turkey.

HMRC informed GVC yesterday that it was now investigating “potential corporate offending” by the operator itself. GVC claimed that the tax authorities have yet to provide details over any of its historic conduct, with the exception of reference to section 7 of the Bribery Act 2010, which covers the failure of commercial organisations to prevent bribery. 

Under this provision, an organisation is guilty of an offence if an associated person has bribed another person with the aim of winning or retaining business for that organisation. They would also be guilty if a bribery had been made to gain or hold onto “an advantage in the conduct of business” for that organisation.

GVC also said that HMRC had not clarified which part of its group was under investigation. HMRC declined to comment on its inquiry.