Friday March 13,2015 : ITALIAN TAX HASSLE IMPACTS AMAYA SHARE PRICE (Update)
It should be remembered that Italian finance police claims do not constitute a conviction.
The disclosure by the Italian financial police earlier this week that it was investigating a Euro 300 million possible tax evasion case against Amaya Gaming – Pokerstars subsidiary Halfords Media Italy created international ripples that negatively impacted the group's share price, driving it down a significant 8 percent at one point.
Whilst there has been a recovery as good sense prevails over initial concern, the incident again illustrates how vulnerable listed companies can be, even where there has been no trial process and certainly no conviction…in other words, a mere official assertion can cause serious actual and potential damage to a respectable company and its reputation.
Both Pokerstars and Amaya have been commendably quick in issuing statements explaining that the alleged offences occurred prior to the change of ownership, and that in any case the company has been actively cooperating with investigators in the long-running case.
Communications chief Eric Hollreiser commented:
"PokerStars has been working with Italian tax authorities since they launched an audit several years ago. We have operated in compliance with the applicable local tax regulations and have paid Euro 120 million over the period covered by the audit.
"Like many other global e-commerce companies, we vigorously dispute the stance of the tax authority regarding local establishment. The audit is ongoing and we hope to resolve the issue in our favor soon."
A bald statement from the Italian authorities does not constitute a final ruling against the company, and this issue may have a way to run yet.