(updating with further background information)
LONDON (AFX) - BetonSports PLC's decision to terminate the contract of chief executive David Carruthers is part of a wider campaign to distance itself from controversial founder Gary Kaplan, sources close to the beleaguered online gaming firm told AFX News.
Carruthers, a former Ladbrokes executive, was brought into the business in June 2000 to prepare it for a UK listing which eventually occurred in July 2004.
He was the only member of the board to have a connection with the pre-float business and the decision to fire him is believed to be part of a strategy to remove any links between the present board and Kaplan's regime.
'The reason why David's contract was terminated, rather than suspended, is because they wanted to sever all ties with Gary Kaplan,' a source said.
Last week, a 22-count indictment was served by a federal grand jury in Missouri on BetonSports and 11 individuals, including Carruthers and Kaplan, alleging various charges of racketeering, conspiracy and fraud.
Kaplan is a former New York bookie who moved his operations to the Caribbean after being arrested on gambling charges in New York in 1993.
However, sector followers say his activities continued to be monitored by US authorities culminating in a warrant being issued for his arrest earlier in the month. He is believed to be in Costa Rica where he still resides.
'Kaplan is the main focus of the indictment,' a source told AFX.
Kaplan has been charged with 20 violations of US federal law. Although he ceaseed to have an active role with BetonSports, he remains a 15.5 pct shareholder.
Carruthers was detained earlier this month at Dallas-Fort Worth International Airport as he waited to board a flight to Costa Rica, where the company has a major operation. He remains in custody after his lawyer asked that a bail hearing be postponed.
Carruthers' position became even more tenuous after a report in The Mail on Sunday made allegations relating to parties he held for high rollers at the company's Costa Rica spa and health club.
In a statement today, BetonSports noted allegations of 'improper activity occurring at the group's Costa Rica business premises during VIP parties and other events'. However, the company stated that all the allegations relate to the time prior to its float.
A source told AFX it has yet to be decided whether Carruthers will be paid for the twelve months remaining on his contract.
Shares in BetonSports remain suspended and its poker, casino, and betting websites have been closed down. email@example.com msc/slm COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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