Coral Owner Entain Has Accounts Investigated
The owner of major UK betting brands Coral and Ladbrokes is having its accounts assessed by the industry regulator.
Ladbrokes owner Entain is having its accounts checked over. © Gerd Altmann, Pixabay
Key Facts:
- Gambling giant Entain owns top brands like Coral and Ladbrokes
- KPMG handled the company’s accounts for the year 2022
- But the FRC is now checking over the accounts following reports of irregularities
- KPMG said it will cooperate with the FRC while Entain did not comment on the news
Entain’s accounts for the year 2022 were handled by the leading accounting firm KPMG, which is part of the Big Four in the sector.
The Financial Reporting Council (FRC) has now confirmed that its enforcement division is going to look into KPMG, though it did not give any further details about the investigation.
Reports indicate that it is Entain’s accounts that are the subject of the assessment, although the gambling giant has not yet offered a comment on the news.
Entain In The Spotlight
Entain, which is one of the biggest companies in the gambling industry, owns major brands such as Bwin and Sportingbet.
The firm saw its share price drop by around 2% on Monday morning when the news broke, making it the worst-performing stock in the FTSE 100 and writing millions off its valuation.
Reports suggest that the FRC’s investigation could be to do with a Turkish business owned by Entain between 2011 and 2017 that was the subject of bribery allegations.
“We will cooperate fully with the FRC to conclude this matter as quickly as possible,” said a spokesperson for KPMG UK.
Entain previously set aside a total amount of £585 million to cover the cost of an agreement it came to with HMRC over the issue. Although that figure was included as a liability in Entain’s 2023 accounts, the company ended up paying out £615 million.
The total amount included a seven-figure sum covering the costs of both the Crown Prosecution Service and HMRC, along with a further £20 million contribution to charity.
More Problems For KPMG
Despite its status as one of the best known accountancy companies in the UK, KPMG has been enduring a difficult period with the latest FRC probe being another testing chapter for the firm.
KPMG was hit hard by the 2018 collapse of Carillion, which was an audit client of the business, with an investigation highlighting its failings.
Jon Holt, the chief executive of KPMG UK, has been targeting improvements in audit quality as a major goal but the FRC investigation into Entain’s accounts comes as another blow.
Fines have been issued to the accountancy group over its filings for companies such as Eddie Stobart Logistics, Rolls-Royce and BNY Mellon, as well as the firm behind the Revolution bars.
KPMG has been the auditors of Entain since 2018 and the firm was paid more than £3 million for handing the 2022 accounts that are the subject of the FRC investigation.
Entain, which is not being investigated, recently said it expects its EBITDA to be at the top of its forecasted range of £1.04 billion to £1.09 billion.
