Three of Australian-listed Betcorp's four directors have resigned within the course of a month, making it necessary for the company to suspend trading until a minimum of two new directors are appointed and information regarding the circumstances can be delivered to the market.
The resignations are likely a consequence of the company's posting poor results for the first half of 2004, reporting an EBITDA loss of A$2 million compared to a profit of A$12 million the previous year. The company will remain silent until it releases a statement later today, but rumors are now circulating that the largest shareholder, Bill Scott, is attempting to gain control.
Betcorp is the parent company of Antigua-based sports book World Wide Tele-Sports (WWTS) and also Northern Territory, Australia-based Sportsbet. Formerly called Consolidated Gaming Corp, Betcorp acquired WWTS in January 2003 in a reverse takeover. Through the deal, WWTS became a publicly traded company on the Australian Stock Exchange and planted many of its key personnel into the Betcorp management team.
Last year was successful for Betcorp, but the company incurred heavy losses in the first quarter of 2004 due to U.S. gamblers obtaining higher-than-normal betting limits and consequently placing many correct wagers. Meanwhile, Betcorp's stock, which peaked at $0.78 per share in mid January, has steadily plummeted to $0.16 per share.
Simon Noble, CEO and executive director of WWTS, was the first Betcorp director to resign on Aug. 6. In its official statement, Betcorp said Noble left for personal reasons, but Jessica Davis, vice president of WWTS, resigned in the same week, and rumors speculate that both may have been released from Betcorp as a consequence of the company's poor performance.
Betcorp's chairman and non-executive director, John Priest, resigned from his position Aug. 27, and CEO Richard Barker stepped down five days later , prompting the company to halt trading on the Australian Stock Exchange.
Betcorp released a statement two days after Barker's resignation explaining that it was necessary to suspend trading until the company could appoint at least two new directors and provide further information on its circumstances to the market. The company expects to resume trading this week. The only director remaining is William Green, a non-executive.
Meanwhile, Bill Scott, who founded WWTS in 1995, is rumored to be attempting to regain control of the company. Scott retained a large chunk of shares during the reverse acquisition in early 2003 and now possesses the largest stake (somewhere between 27 percent and 38 percent) in the company.
Scott stated in early 2003 that health problems led him to seek a suitable ownership group. Rumors speculate that he is unhappy with Betcorp's handling of WWTS, and is therefore taking actions to secure control.