gvc governance stands by turkish freeload

gvc governance stands by turkish freeload

by 08.07.2019 0 comments

The governance of FTSE100 gambling group GVC Holdings has issued a statement on the press coverage related to the firm’s 2017 sale of its ‘Headlong limited’ Turkish business unit.

This weekend, The Sunday Times reported that GVC Holdings faced ‘fresh questions over its corporate governance’, disclosing that Group CEO Kenneth Alexander had sanctioned the sale of Headlong to business associate Ron Watts.

Pursuing its £3.5 billion takeover of Ladbrokes Coral Plc, GVC governance sanctioned the sale of its Turkish unit to operating firm ROPSO Malta, as a means of clearing potential CMA regulatory hurdles.

The sale of Headlong was to initially set at €150 million to be paid over a period of five-years. However, GVC governance would waiver ROPSO’s transaction, moving to terminate all involvement in Turkey.

At the time, GVC disclosed that its ‘Turkish clean break’ had cost the company circa €46 million.  

This weekend, The Sunday Times reported that Ron Watts, one of the three owners of Ropso Malta (now called Dochandoris), co-owns a stud farm in Scotland with Kenneth Alexander.

Issuing a statement, GVC governance underlines that its board categorically refutes suggestions that ‘the Group, or senior management, continue to benefit from any operations servicing the Turkish market’.

Countering criticism of a ‘lack of transparency’ by governance, GVC states that its disposal of Headlong was subject to ‘an arms-length competitive process, overseen by Houlihan Lokey investment bank’.

The FTSE firm maintains that it has disclosed all relevant information related to its transaction on ‘disposal reports’ published in November and December of 2017.

In relation to forfeiting ROPSO’s payment, GVC underlines that investors had been made aware of the Turkish arrangement as part of GVC’s acquisition offer presented to Ladbrokes Coral investors on 22 December 2017 (Rule 2.7 Announcement)

“The board today re-iterates the fact that subsequent to the disposal of the Group’s Turkish-facing business, GVC has no activity either directly or indirectly linked to the Turkish market”, reads GVC’s statement.

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