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Investors seeking compensation of up to PS100m in Turkish corruption case

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A claim group is being filed by several investors against Entain, alleging Entain failed to inform investors of historical offenses it committed in Turkey.

Fox Williams, a law firm, announced on Wednesday 11 June that it would seek to compensate institutional investors of the operator for more than PS100m.

Entain will file the claim by the autumn of 2024 in relation to the Deferred Prosecution Agreements (DPAs) that it signed with Crown Prosecution Service in respect of bribery, corruption and other offences in Turkey committed in December 2023. Terms of the DPA had been outlined initially in August.

The company had agreed at the time to pay an amount of PS585.0m ($752.2m) plus a penalty of EUR694.2m. The company was ordered to donate PS20.0m as well as contribute PS10.0m towards CPS costs and HMRC.

Fox Williams, in response to iGB’s questions, said that it expected the total compensation amount to be more than PS100m. (EUR118.3m/$127.9m).

Fox Williams has said that it will submit the claim on grounds of Entain failing to inform investors about the investigation. The period of the claim is from 1 July 2011 until 31 December 2023.

The firm said: “We are convinced that senior executives at Entain were aware of the fact that their Turkish subsidiary had been involved in bribery, but did not inform its shareholders. This was a violation of the company’s disclosure obligations and good governance standards.”

Fox Williams alleges that its business violated Sections90 and 90A in the Financial Services & Market Act of 2000. The sections deal with compensation to those who have lost money due to false or delayed securities statements.

Fox Williams stated on their website that “the claim is an opportunity for Entain investors to receive compensation.” We urge all eligible investors to take part.

Why was the investigation launched?

HMRC began its investigation in November 2019. HMRC sent an order to the Entain Holdings UK Limited, a subsidiary of Entain Holdings UK Limited. The request was for information on Headlong Ltd.

Headlong Ltd was owned by Entain from 2011 until 2017, when the company was sold. Entain denied that it continued to profit from Headlong Ltd even after its sale.

Entain, then GVC, confirmed in July 2020 that HMRC would expand its investigation into “potential corporate offences”. The investigation included Section 7 of the Bribery act 2010.

Entain didn’t confirm that they were working on a resolution until May 2023. Entain warned at the time that HMRC could impose a “substantial penalty” on it.

Entain has been contacted by iGB for a comment.

Entain issued a press release confirming its review of anti-bribery policy following the DPA resolution in December.

Barry Gibson, the former chairman of Entain said: “This is a final step in an investigation that HMRC has been conducting into a company that had been sold six years earlier by a previous management team.”

The court has acknowledged our extensive and proactive cooperation at each stage of the proceedings. Entain is now fundamentally different.”

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