In February 2008 the sycophantic press were falling over themselves to proclaim the great news that Joe Lewis had taken a stake of 7% in Ladbrokes, worth about £133m. (The market had valued Ladbrokes at £1.9 billion at this time.).

The Guardian's Nils Pratley was compelled to write at the time;

"Has Joe Lewis, the British billionaire, built a stake of 7% in Ladbrokes? The company apparently doesn't know, but the story smells true. Ladbrokes would appeal to a value hunter. A sizeable chunk of the revenues comes from electronic roulette machines. These properly belong in casinos but the government has agreed they can be operated by high street bookies. For Ladbrokes, it's risk-free cash. Lewis may also have noticed that his multi-millionaire friends are gamblers by instinct. Ladbrokes is doing nicely with its volatile, but often lucrative, income from "high rollers". Yes, deregulation has produced more high street competition, but the market leader is unlikely to be blown away. Given the weakness in the shares, Lewis would be making a reasonable bet."

I wrote to Pratley at the time, suggesting that that his comments were careless in the extreme, and based upon no real knowledge of the gambling industry's structure, its regulatory framework and its future outlook. Pratley did not reply.

In the interim period, Joe Lewis chalked up an estimated $800m loss in the collapse of the American investment bank Bear Stearns. Ladbrokes, meanwhile, recently announced results for the 3 months ended 30 September 2009. Group net revenue was down 15 per cent. Gross win margin was significantly lower due to poor horseracing margins and an exceptionally low football margin. Group operating profit fell 58 per cent to £22.4m.

On the afternoon of 12 October 2008, following the roll out of a 275m rights issue, Ladbrokes shares were trading at 141p. This would suggest that if Lewis were to be still holding his 7% in Ladbrokes, he would be sitting on a loss somewhere in the region of 60m.

JP McManus and John Magnier, have also allegedly built up stakes in Ladbrokes, and they too will (if the stories are true) also now be sitting on significant paper losses.

There is no reason as to why the heavily discounted rights issue should not lead to a change of management; moreover, shareholders should be asking for the £957,000 bonus that was paid to Bell this year to be returned. They should also question just why Bell was granted a 11.4% salary increase last summer, which at the time, was attributed to "reflect competitive pay levels and the continuing high levels of leadership Mr Bell gives to the business."