The board of 5050Poker’s holding company has blamed the fact it is only likely to pay players 15% of their outstanding balances back on the “false information” it received from the poker room’s management and auditors regarding the state of the business.
5050Poker, owned by NASDAQ OMX First North-listed 5050Poker AB Holdings, was shut by Microgaming on 15 June after a “bank run” sparked by Microgaming imposing a two-table cap on the number of tables 5050 players could sit at simultaneously led to there being “not enough money in the company to cover the players’ balances,” said the board today.
Having subsequently taken the decision to liquidate its 5050Poker Ltd subsidiary after not being able to provide the necessary bank guarantees to regulator the Malta Lotteries and Gaming Authority, the board of the holding company revealed yesterday that the room’s operational costs had “for a long time exceeded the revenues”, resulting in player funds being used in the operations of the company. This had been exacerbated, it added, by the fact the poker room had also been using these player funds to pay more than €150,000 in fines levied by Microgaming on the room “for having too many winning players”.
The board laid the blame for this going undetected on the “false information” on the size of the players’ fund, operational costs and the company’s assets presented to it by the management and the auditors of of 5050 Poker Ltd.
“It is unclear how this situation has gone undetected by the appointed Auditors in Malta for 5050 Poker Ltd, nor by the auditors for 5050 Poker Holding AB, both having revised the accountings for 2011”, said the board.
Poker5050 said that while most of the assets remaining would for the purposes of liquidation be used as paybacks to the players “on a proportional ratio”, there was no reason “to believe that the payback ratio will be higher than 15% of the actual balance of the players’ funds,” the board stated yesterday.
The Board of Directors said it would try and sell the company in order “to save as much shareholder value as possible.”
Managing director of Poker5050 Holding AB, Patrick Sjögren, has been relieved from his duties. “However Patrick will assist in the process of investigating how the current situation could occur”, said the board.