The chief executives of Lincoln Park and its parent company are stepping
down from their positions in the wake of their indictment yesterday on
charges they schemed to bribe a law firm headed by the former speaker of
the state House of Representatives.
Wembley plc chief executive Nigel Potter and Lincoln Park chief
executive officer Daniel Bucci will "stand down" from their positions
because of the significant amoutn of time expected to be devoted to
their defense,
according to a statement published on the Wembley Web site.
The company did not indicate how long the two would be away from their
jobs. In the meantime, it said Claes Hultman, chairman of Wembley, will
assume an executive role and that the general manager of Lincoln Park
will assume overall responsibility for operations there.
The company also noted that it had cooperated with the grand jury during
the 22-month probe. But it emphasizes it believes the allegations are
"without foundation" and that Lincoln Park and the executives will
"vigorously defend" themselves against them.
Shares of Wembley
plc trade on the London stock exchange, but the video-lottery
terminals that take in millions of dollars each week at Lincoln Park are
at the core of the company's business.
The London exchange had closed for the day by the time news broke
yesterday of the indictment on charges that Potter and Bucci schemed to
bribe the law firm headed by former House Speaker John Harwood.
But when the company warned in March of a "significant possibility" of
charges by a Rhode Island grand jury, Wembley shares plunged 28 percent
in four days and never fully recovered.
Today, Wembley shares plummeted 21.5 percent on the London exchange
after investors there learned of the indictment. The stock closed down
at 525 pence, or $8.40. It was the company’s steepest percentage decline
in nine years.
Merrill Lynch analyst Andrew Burnett in London had previously downgraded
the stock from a hold to a sell after the company issued a press release
announcing the indictment there.
Wembley, which describes itself as a "track-based gaming company" after
selling off other holdings, does not break down in detail overall
profits from Lincoln Park.
The company's latest financial results released last month, however,
indicate that its U.S. operations account for more than 90 percent of
the company's profits. The release announcing results for the first six
months of this year described Lincoln Park as its "major business" in
the United States even though the company also owns three greyhound
tracks and one horse track in Colorado.
The company highlighted the $5 million collected weekly at Lincoln's
VLTs as a major reason for a 170-percent jump in earnings per share from
January to June.
At the same time, Wembley repeated its warning to investors that charges
could be forthcoming from the Rhode Island grand jury investigation.
It also disclosed that the company had spent about $700,000 in legal
fees on the case during the first six months of this year, dragging down
the performance of its U.S. operation.
Known best as the former owner of the famed Wembley Stadium, Wembley
first bought into Lincoln Park in 1990, acquiring an 80-percent share
when it bought the track in a joint venture with a Montana company,
United Totalizator Corp.
The deal was part of a larger, $90-million purchase of five U.S. dog
tracks -- one in Lincoln, three in Colorado and one other in South
Dakota -- from Joseph M. Linsey and Alfred S. Ross.
At the time, Wembley owned six greyhound tracks in the United Kingdom as
well as Wembley Stadium.
Wembley purchased the remaining 20-percent share of Lincoln Park and the
others and took sole control of them in August 1992 for an undisclosed
price.
The company sold Wembley Stadium in March 1999 and the surrounding real
estate in August 2002. The famed soccer stadium and rock concert venue
was torn down last year to make way for a new stadium built by others.
Potter, the CEO who allegedly conspired to bribe the McKinnon and
Harwood law firm, joined Wembley in 1992 as finance officer. An
accountant by training, he earlier had worked for Cable & Wireless plc,
a London-based international telecommunications company.
He also serves on the board of Regent Inns plc, an entertainment-venue
operator.
Potter, 56, was elevated to deputy chief executive in May 1998 and then
chief executive in October 1998. Potter reports to Wembley chairman
Hultman.
