David Baazov, chairman/CEO of Canadian online gambling giant Amaya Gaming, has announced he’s taking an “indefinite” leave of absence in a bid to distance his company from his growing insider trading scandal.
On Tuesday, Amaya issued a statement saying Baazov was “voluntarily” taking this leave of absence to “focus on preparing an offer to acquire Amaya and to avoid a distraction for the company” while he deals with the insider trading charges filed against him last week by Quebec securities regulators.
Despite his temporary exit, Baazov will continue to draw his Amaya salary and will remain a member of Amaya’s board of directors. Current Rational Group CEO Rafi Ashkenazi has been installed as Amaya’s interim CEO while Amaya director Divyesh Gadhia will serve as interim chairman. Gadhhia is also chair of the ‘independent’ special committee tasked with considering Baazov’s bid to take the company private.
The statement included a personal message from Baazov, who said he remains “dedicated to doing the right thing for Amaya and all its stakeholders.” Baazov believes stepping down “in the short term” will allow him to “vigorously contest” the charges against him while (hopefully) avoiding dragging the company down with him.
The statement appears to have had the intended effect, as Amaya’s shares were up 13% at the time this article was published. The rise reversed the downward spiral that saw Amaya shares lose one-fifth of their value following the AMF’s initial announcement of the charges against Baazov.
Amaya’s statement says its special committee has begun its own investigation of the more recent revelations that the Autorité des marchés financiers (AMF) investigation into insider trading by Baazov, fellow Amaya exec Benjamin Adhoot, former advisor Yoel Altman, three companies and 13 other individuals – including Baazov’s older brother Josh/Ofer Baazov – extends far beyond transactions related to Amaya’s 2014 acquisition of the Rational Group, the parent company of PokerStars and Full Tilt.
The AMF files identified David Baazov as the main source of leaked info on Amaya transactions dating back to 2010 that allowed the other accused individuals to earn $1.5m from illegal transactions involving seven companies. Amaya says its committee has expanded its mandate to investigate “these additional matters.”