The popular bingo giant Jackpotjoy has recently come under attack from the most unlikely of sources – former UK Lincolnshire social worker Fraser Perring.
Perring, the founder of Viceroy Research along with his Australian-based colleagues Gabriel Bernarde and Aiden Lau have published a 37-page report on Steinhoff, the international holdings company responsible for Jackpotjoy that has raised many queries about the London-listed conglomerate.
Swiftly following the release of this report in December, the Jackpotjoy share price was seen to drop precipitously, calling the future of the brand into question.
Irregularities spark Investigation
Perring, a short-seller who left behind an outstanding career in child-protection after finding success on the stock market had taken a short position in the stock and quickly noticed that something was not right.
He is asserting that the bingo-chain is over-dependent on one of its key suppliers and that it has taken over £100 million in funds to build and maintain its online platform and presence.
Jackpotjoy is under investigation as the “transactions “appeared to benefit executives high up within the organisation rather than investors in the stock.
Following the publication of the report and the subsequent resignation of the South African retail giants CEO Markus Jooste, Viceroy Research detailed how company insiders both current and former and controlled off-balance sheet entries of its accounts in an attempt to exaggerate revenues and conceal losses.
Uncovering a Scandal
Steinhoff has now launched an internal probe into their own accounting, with auditors expected to be thorough in their assessment of the irregularities. However, the repercussions of this financial scandal are being felt not just by the holding company and its subsidiaries but on a global scale.
Four of US’s largest banks – Goldman Sachs, Bank of America, JP Morgan Chase and Citigroup have all been negatively impacted with some experiencing up to $1 billion in losses relating to the incident.
Steinhoff is not the first global organisation to have its wrongdoings exposed by Viceroy. It has been purported that other South African giants like Aspen Pharmacare have felt Perring’s wrath with the country’s stock market being sent into a panic experiencing;
- A loss of more than $3 Billion worth of property stocks
- A 10% decline in the drug makers shares
Perring, who is now focussing his efforts on uncovering incriminating financial conduct, splits his time between his home country of Britain and New York. He commented that he noticed Steinhoff’s acquisition of Mattress Firm for $64 per share which was a 100% increase on the closing price.
He remarked that he was “stunned” to see the price that Steinhoff had offered for the shares and this is what led him to investigate further.
With Steinhoff facing an uncertain future, so are all of its holdings. Jackpotjoy’s popularity in the UK is well-known as is its well-liked brand ambassador Paddy McGuiness.
So far, there have been no changes to Jackpotjoy’s operations and everything does seem to be very much ‘business as usual’ but with investigations still ongoing, it is only a matter of time before they too could be facing an uncertain future.