BETFAIR has admitted breaching accounting rules by paying £80m to investors between 2011 to 2013.
The gambling website’s annual accounts revealed £30m in dividends and £50m in share buy backs were issued over three financial years, contrary to ICAEW guidance.
The payments did not meet the conditions of realised profits and distributable reserves, the rules of which were amended in 2010, the Financial Times reported.
Betfair said in its report: “As a result of certain changes to the technical guidance issued by the Institute of Chartered Accounts [sic] in England and Wales (the ‘ICAEW’) in October 2010, the company did not have sufficient distributable reserves to make those distributions and so they should not have been paid by the company to its shareholders.”
The company has taken steps to ensure investors will not have to repay the dividends, while the September annual general meeting will be used to approve the cancellation of shares affected by the buy back.
A Betfair spokesman told the newspaper the mistake was a result of a “minor technical point arising from 2010” and will have “no impact on shareholders”.
The business struggled to maintain its value after its 2010 initial public offering, with shares losing as much as 50% of their value in the first six months after floating.
As part of the government’s Flag It Up! campaign, Henry Cooper, former president of the AAT, highlights how accountants can protect themselves and their businesses from money launderers
The FRC has said that the investigation will 'consider, but not be restricted to, issues regarding misstated accounting balances'
Mark McMullen joins the private client services team from Smith & Williamson
Merger between Clear & Lane Chartered Accountants and Magma Chartered Accountants was finalised on 3 February