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For some time, David Baazov was hailed as a shrewd businessman, a smart risk-taker, and a visionary for the online gaming world.

Today, Amaya Chairman and Chief Executive Officer David Baazov is taking an indefinite leave of absence of the company.

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The press release this morning reports that the leave of absence is voluntary and effective as of yesterday, March 28. He is said to be on leave “to focus on preparing an offer to acquire Amaya and to avoid a distraction for the company while he responds to certain allegations made against him by the Autorité des marchés financiers (AMF), the securities regulatory authority in Quebec.”

Those left at Amaya today may want to lock the door.

amaya

Certain Allegations 

The AMF investigation began at the point of Amaya’s acquisition of Rational Group, the company that encompassed PokerStars and Full Tilt, in 2014. The price surges of Amaya stock in the days preceding the announcement of the purchase flagged authorities, and Baazov was under suspicion. He denied all accusations at the time, as if such an inquiry was standard procedure in light of such a significant business deal.

Last week, the AMF filed charges. There were 23 charges in total against three people and three companies. Baazov was the recipient of five charges, “in particular for aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of the securities of Amaya Inc., and communicating privileged information.”

Of course, Baazov issued his own statement to deny the AMF accusations. “These allegations are false and I intend to vigorously contest these accusations. While I am deeply disappointed with the AMF’s decision, I am highly confident I will be found innocent of all charges.”

Days later, the AMF released more information. As it turns out, the other people facing allegations were Josh Baazov, David’s older brother, and Craig Levett, Josh’s friend. And there were more people who benefited from insider trading information as well, according to the AMF. Individual transaction profits ranged from $200 to $155,839, and more than $800K in total profit was gleaned from said info. The Baazov brothers alone were said to have benefited to the tune of nearly $1.5 million.

These are not minor allegations. In the world of finance, this is not only shady behavior but criminal.

Prepare a Defense, Not an Offer 

The idea that Baazov is still going to work on the offer to acquire Amaya is interesting.

News first broke of this development on February 1, as Baazov announced his intention to make an all-cash proposal to acquire Amaya and take full ownership. He partnered with a group of investors, unnamed to this date, to plan the purchase. Amaya then established a special committee to evaluate the offer, which was estimated to be at C$21.00 per common share. A formal bid, however, has never been put on the table.

Industry analysts were initially wary of the offer, which seemed low and was never substantiated with anything in the way of a formal bid. Some felt that returning a company like PokerStars to the private sector would reinvigorate growth, though it was difficult to determine the exact motives of Baazov himself.

Upon the revelation of the AMF charges and Baazov’s decision to take the leave of absence, Amaya noted that the Special Committee “has not made a determination as to whether a sale of Amaya is in the best interests of the company at this time.” It went on to say that it will “continue its review of alternatives available to Amaya, including continuing its current business plan as a publicly-traded company.”

As Baazov faces damning and serious charges from the AMF, it might be wise to spend more time with attorneys and family than with business partners planning a takeover of the company that is losing ground by the minute due to his actions. A time of self-reflection might be in order.

Stand By Your Man…But at What Cost?

Mr. Baazov may be a nice man. And there is no doubt that he is an intelligent and clever man in the world of business. But there are only so many things that he should be able to do to a company before the other executives examine whether there is more harm being done than good.

Rafi Ashkenazi, who has been serving as the CEO of Rational Group, will take over as Interim CEO while Baazov is on his paid (yes, paid) leave of absence. While everyone else is left at the office to pick up the pieces, Baazov is being paid to work on a bid for a company takeover.

This is certainly simplifying the issue. However, with Baazov out of the office, it might be smart for the rest of the Board of Directors and company executives to take a hard look at the present and the future to determine what is best for the business. Baazov laid a solid foundation for Amaya, but moving forward without the constantly increasing weight his baggage might be the smartest decision.

With all due respect, Mr. Baazov, don’t let the door hit you on the way out. 

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Jennifer Newell

Jennifer has been a freelance writer in the poker industry for a decade. She left a full-time job with the World Poker Tour to tell the stories of poker. She now lives in St. Louis, writes about poker while pursuing other varied interests, and speaks her mind on Twitter… a lot.

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