Investors could seek more than £100m in compensation from the owner of Ladbrokes and Coral for failure to update them on issues with bribery and corruption at the group’s former Turkish operation.
The planned action, led by the legal firm Fox Williams, follows Entain’s agreement to pay almost £600m – one of the largest financial penalties ever imposed in the UK – in a deal with HM Revenue and Customs finalised in December 2023 after an investigation into alleged bribery.
Shares in Entain have nearly halved since the company said in May 2023 it was likely to have to pay a substantial penalty to settle with HMRC.
It said in August last year it had set aside £585m related to the investigation settlement and the deal was finalised in November including a financial penalty and a “disgorgement of profits” – in which funds from illegal or wrongful acts are given up. The company also agreed to make a charitable donation of £20m and to pay a contribution of £10m to the costs of HMRC and the Crown Prosecution Service.
HMRC originally launched an investigation in 2019 into “potential corporate offending” by a Turkish-facing online betting and gaming business that Entain owned between 2011 and 2017, as well as the activities of third-party suppliers and former employees of the group.
Entain – formerly known as GVC – was accused of failing to have the correct procedures in place to stop people taking part in bribes that benefit the business.
HMRC announced in July 2020 that it was examining “potential corporate offending” by Ladbrokes’ former Turkish subsidiary in a shock revelation that sent shares tumbling by 12% at the time.
A spokesperson for Entain said: “We are currently unaware of any action of this kind against the company, and have not received an issued claim. We would defend any such action robustly.”
Andrew Hill, a partner and head of the securities litigation team at Fox Williams, said: “This claim will offer institutional investors the opportunity to recover substantial losses but more importantly serve to improve transparency and governance within the UK’s gambling sector, reminding public companies that they need to take their disclosure obligations seriously.
“Hopefully this will therefore have the knock-on effect of improving corporate behaviour, because public companies should know that their shareholders won’t let them get away with misconduct.”
Hill is also leading a £100m claim for investors in the online fashion specialist Boohoo after reports in 2020 alleging its suppliers in Leicester were mistreating workers caused its share price to plummet.
Boohoo said in response to the claim: “We have been made aware of a claim that is being brought by certain shareholders. The company strongly contests the allegations and will vigorously defend any claim.”
Hill has previously led two shareholder claims against Tesco that were settled out of court over the supermarket group’s admission of a profits overstatement in 2014.
