GVC Denies HMRC Inquiry Links to Wirecard Controversy

The GVC board has dismissed rumors regarding an inquiry into its past Turkish operations, which were associated with the controversy surrounding the troubled payments provider Wirecard.

A piece in The Times suggested a link through Kalixa, a payments processor that GVC sold after acquiring bwin.party in June 2017.

Senjō Group, a Singapore-based payments firm, agreed to purchase the business for €29 million in December 2016.

However, GVC firmly denied the allegations, stating that the investigation by Her Majesty’s Revenue and Customs (HMRC) involved a former third-party payment service provider.

In a statement, GVC declared: “The board can confirm that it possesses no evidence to suggest that the HMRC investigation has any connection with the payment service provider mentioned in the newspaper report.”

The company added that it is fully cooperating with the inquiry and will provide an update to the market in due time.

The Times article mentioned that the alleged connection “is a theory and was presented by investors who may hold short positions in GVC stock.”

Although the UK’s tax agency, HMRC, initially concentrated its inquiry on these third-party firms, GVC announced on July 21 that the tax department had broadened its investigation to analyze the operator’s “possible corporate wrongdoing” under Section 7 of the Bribery Act 2010. At the time, the company stated it was unclear which subsidiaries were being examined and was not notified of the exact nature of the inquiry.

The operator mentioned the unnamed payment providers’ only link to GVC was through providing services to its Turkey-facing business, which was sold to Ropso Malta in November 2017 following a merger agreement with Ladbrokes Coral Group. GVC later relinquished its €150 million earnings from the deal in February 2018.

Last July, GVC publicly refuted it was still profiting from the divested Turkish business, again responding to media speculation.

The operator added: “As reported on July 16, 2020, GVC continues to perform well and anticipates sharing more details on its interim financial outcomes on August 13, 2020.” “GVC remains focused on national regulated and licensed markets, from which it derives 96% of its income.”

On Thursday (July 30), shares in GVC Holdings dropped 3.14% to 691.60 pence in London.