OPAP’s sell-off hits a snag as buyer clashes with management

The privatization process of OPAP gaming company is on a knife edge ahead of the signing of the agreement between the new main shareholder, Emma Delta, and the state privatization fund, TAIPED.

The reason for that is the composition of the management team of the OPAP subsidiary that has won the license to operate the state lotteries, OPAP Investment Ltd. In this special-purpose consortium OPAP is joined by Lottomatica, Intralot Lotteries and Scientific Games.

Emma Delta’s objections concern the right of veto within the 11-member OPAP Inv. board that the four members from Intralot and Scientific Games – two from each – will have. The composition of the board had not been presented in full to the State Audit Council that monitored the legality of the tender for state lotteries which the OPAP-led consortium won.

TAIPED’s response to that was that the data about the consortium had been published in full and that Emma Delta could have taken that data into account. An OPAP source adds that Emma Delta has agreed to the OPAP management performing its duties as long as it does not make any major changes to the corporation with the exception of the contract for its technology supplier and the contracts on lotteries. “They had explicitly accepted that,” the same source stressed.

Another OPAP source noted that the obligations of the management burden the company and not its shareholders, regardless of the size of their stake.

The fact that Intralot and Scientific Games will have veto rights regarding OPAP procurements creates a conflict of interest, says Emma Delta, as they already have a privileged relationship with the Greek gaming monopoly: Intralot in software procurement and Scientific Games in printing. As a result, Emma Delta officials insisted in a letter sent to OPAP management and to TAIPED that procurement contracts will need approval with a qualified majority.

OPAP’s side responds that the various procurement contracts and total payments to suppliers had been recorded in detail in a letter on November 30, 2012, long before the completion of the tender for OPAP.

Emma Delta will not back down and is asking for the State Audit Council to probe the procurement contracts and for “their terms to become the object of negotiations from scratch.” In practical terms, this means that the new shareholder is demanding that the partners of the lottery-operating company correct their charter and do not sign any procurement contracts.