888 Holdings PLC (LSE:888) shares dropped nearly 20% on Monday following news it has suspended VIP activities in some of its .com markets pending the outcome of an internal compliance investigation and. separately, announced the departure of Itai Pazner, its chief executive officer (CEO) and executive director.
The betting company said that, following the review, it had come to light that certain best practices have not been followed in regard to Know Your Client and Anti-Money Laundering processes for 888 VIP customers in the Middle East region.
“While further internal investigations are underway, the board has taken the decision to suspend VIP customer accounts in the region, effective immediately” the company said In a brief statement.
The group, which is headquartered in Gibraltar and owns and operates brands including 888casino, 888sport, 888poker, William Hill and Mr Green, estimated that the impact is less than 3% of group revenues, should the suspensions remain in place.
“Based on the board's current understanding, the process deficiencies identified are isolated to this region only”, 888 added.
Lord Mendelsohn, the company's chair, promised strong action in response: "The board and I take the group's compliance responsibilities incredibly seriously. We will be uncompromising in our approach to compliance as we build a strong and sustainable business."
In a separate statement, 888 also announced that Pazner is immediately leaving office as CEO and as a director.
The company said Lord Mendelsohn, is assuming the position of executive chair on an interim basis while the board searches for a permanent CEO.
Lord Mendelsohn commented: "On behalf of the Board I would like to thank Itai for his significant contributions to the business over more than 20 years, including the last four as CEO. Itai has played a very important role in building a business with powerful proprietary technology, and has overseen successful early stages to the William Hill integration process. We wish him well in his future endeavours."
In a later update, 888 also announced that further to its announcement on 13 January 2023, the company's board and Yariv Dafna, its chief financial officer and executive director, have agreed that he will remain in his posts until the end of 2023, rather than stepping down on 31 March 2023.
888 further announced that Andria Vidler will take over as chair of the ESG Committee with immediate effect.
In early trading on Monday, 888 shares were down 19.9% at 82.60p.
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