James Moore: You can bet Betfair’s investors are not happy
James Moore is the Independent's Associate Business Editor and writes the Outlook City comment column from Tuesday to Friday. He also has a keen interest in disability issues and when not attempting to further injure himself playing wheelchair basketball.
Wednesday 03 September 2014
Outlook Talk about getting egg all over your face. A couple of weeks ago it emerged – via the small print in Betfair’s annual report – that the betting company paid dividends in 2011, 2012 and 2013 and bought back shares in the 2011/2012 financial year that it shouldn’t have. And now corporate governance watchdog Pirc wants investors to vote down the company’s annual report.
The background to this can be found on note 26 on page 144 – but, of course, you knew that – which explains that the company lacked the distributable reserves to make payments during the dates in question. Cure major scandal? Calm down. This a cock-up, not a crisis.
What happened was this: The money to pay the dividends should have been held in Betfair’s holding company as “distributable reserves”. Instead, it had been parked in a subsidiary, putting the betting exchange operator in violation of accounting guidelines. It was only recently that the company woke up to the fact, having called in KPMG to run the slide rule over what it was doing. Hence the note to the accounts.
A mere piffling technical violation, says Betfair, before rather arrogantly claiming that Pirc hasn’t found any traction with its shareholders.
But it’s still a black mark that Betfair, a company which handles vast quantities of punters’ money every day, should have made such an error. And allowed it to go uncorrected for such a long time. Even if it was “only technical”. Perhaps the best bet for investors might be to send it a message by abstaining?
- 1 The difference between a migrant and refugee, in one sentence
- 2 Miley Cyrus calls out hypocrisy of women’s nipples being taboo
- 3 Celebrity Big Brother 2015: Tila Tequila kicked off show after 'describing Hitler as a good man'
- 4 iPhone 5c to be discontinued, no iPhone 6c to replace it
- 5 Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
Spain accused of 'provocation' after letting Russian submarine refuel off Gibraltar
The difference between a migrant and refugee, in one sentence
Allonautilus scrobiculatus: World's 'rarest' creature spotted for only the third time ever
Miley Cyrus calls out hypocrisy of women’s nipples being taboo
Celebrity Big Brother 2015: Tila Tequila kicked off show after 'describing Hitler as a good man'
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
Iain Duncan Smith calls for urgent ESA overhaul as part of drive to cut down welfare costs
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...