Gambling company GVC (GVC) said it was 'surprised' that the UK tax authorities had extended an investigation into the company's former Turkish facing online gambling business. The market was certainly shocked by the news, marking the shares down 9.4% to 789.8p.
HMRC informed the company that it was widening the scope of its investigation and was now examining 'potential corporate offending' by an entity within the group.
The update came as a shock to the group, with the company saying that prior to 20 July it had been understood that no GVC entity was a subject of HMRC's investigation.
The tax authorities, however, had not yet divulged details of the nature of their probe into the company's former Turkish facing online gambling business, which was sold in December 2017, nor had it clarified which part of the firm was under investigation, the company 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,' it added.
‘BIG, DARK RAIN CLOUD’
AJ Bell investment director Russ Mould said: ‘The biggest short-term impact on bookmaker GVC of the expanded HMRC probe announced this morning is the dreaded uncertainty it will create.
‘It’s no wonder GVC’s management complain about the lack of clarity from the tax authorities, it is this lack of clarity which will do the damage. Simply put, management don’t know what part of the business it relates to, nor what the details are bar a somewhat ominous reference to the Bribery Act 2010.
‘Until the position is made more transparent, investors will be forced to fill in the gaps by speculating about the impact it might have on the business and its prospects.
‘The situation has moved from a speck of cloud on the horizon, as GVC faced an initial investigation into payment processing by third parties in its now offloaded Turkish online gambling business, to a big, dark rain cloud hovering over the firm.’
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