SBC News Entain to settle HMRC Turkish dispute with + £600m payout

Entain to settle HMRC Turkish dispute with + £600m payout

Entain Plc has reached an ‘in principle’ agreement with the Crown Prosecution Service (CPS) to resolve its Deferred Prosecution Agreement (DPA) concerning the investigation by HM Revenue & Customs (HMRC) of its former Headlong Turkish business.

This afternoon, Entain informed investors of obtaining preliminary judicial approval from Dame Victoria Sharp, President of the King’s Bench Division, to finalise a £585m payment to HMRC.

As per a corporate update, the company will pay a “financial penalty and disgorge profits, totaling £585m, contribute a £20m charitable donation, and cover £10m in costs for HMRC and the CPS.”

The financial penalty, profit disgorgement, and charitable donation are to be paid in instalments over the four-year term of the DPA, starting from the date of the final court approval.

HMRC initiated its investigation of the former subsidiary, Headlong, in 2019, concerning its online gambling activities in Turkey under the stewardship of GVC Holdings.

Entain had started negotiations with the CPS in May to settle the dispute arising from alleged breaches under Section 7 of the Bribery Act 2010, specifically the failure to prevent bribery by the subsidiary.

The firm’s third-quarter trading update reported a £585m provision set aside for the HMRC investigation settlement, anticipating a judgement by the year’s end.

The board highlighted the company’s transformation since the events in question, underscoring its dedication to regulated markets and maintaining high corporate governance standards.

Chairman Barry Gibson commented: “This legacy issue pertains to a business divested by a past management team six years prior. The company has undergone significant changes since then, and the DPA process has underscored the profound evolution from the GVC of the past to today’s Entain. 

“We remain focused on advancing our operations exclusively within regulated markets and are acknowledged as a leading, responsible entity with unparalleled corporate governance across our business.”

Investors have been notified that the finalisation of the settlement is forthcoming, with Entain poised to seek final judicial approval for the DPA on 5 December.

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