Kenyan number 1 sports betting operator SportPesa is considering taking legal action against its former chair Paul Ndung’u, after a series of allegations of improper business conduct from non-Kenyan shareholders of the company.
Transfers to Offshore Funds
SportPesa officials believe the extent of the utterly false claims from Paul Ndung’u requires a proper response which is nothing less than legal action. The former chair of Sportpesa who still owns 17% in the operator’s former holding company Pevans East Africa stated non-Kenyan shareholders ordered money transfers to various offshore funds in several different countries.
A spokesperson from SportPesa denied these allegations outlining that the company has always been compliant with all legal and tax requirements in all jurisdictions where it operates. These and other suspicious transactions allegations by Ndung’u led to the auditor of the Kenyan business of SportPesa, PriceWaterHouseCoopers to resign.
Investigation by the Serious Fraud Office
Regarding SportPesa’s UK business, Ndung’u made claims that SportPesa Global Holdings was investigated by the Serious Fraud Office, as officials from the non-ministerial government department of the Government which investigates and prosecutes serious fraud and corruption visited SportPesa’s office in Nairobi. The spokesperson for the operator denied these claims stating that SportPesa is ”not aware of any investigation by the United Kingdom Serious Fraud Office”.
Another allegation from Ndung’u, that the company’s board has been sidelined in taking major decisions, as, despite his substantial stake in Pevans, he first heard about the brand name agreement with Milestone Games when the deal was officially announced by SportPesa CEO Ronald Karauri, was also denied by the spokesperson.
“All Sportpesa brand actions have always been done with the knowledge and explicit approval of the board members of all companies involved and in compliance with company bylaws and local regulatory guidance.”Spokesperson, SportPesa
Local Shareholders Are Kept in the Dark
Last week, the long awaited return of the country’s number 1 sports betting operator materialized, but following an intervention from the Kenyan gambling regulator, the Betting Control and Licensing Board (BCLB) operations stopped again.
Milestone Games who attempted unsuccessfully to resume under the SportPesa brand, had entered into a brand agreement with SportPesa Global Holdings, a company whose directors are executives at Pevans East Africa.
The BCLB, though, argued that the rightful owner of the SportPesa brand is Pevans, and besides that, Milestone’s application for a license renewal was for a brand name “Milestone Bet”, the BCLB further explained.
It turns out that either the brand was transferred to SportPesa Global Holdings or the latter does not have the right to enter into agreements related to a brand it does not own. If a brand transfer happened, Ndung’u’s claim that the announcement for the return of SportPesa to Kenya actually revealed the transfer of the brand is right.
In terms of ownership of Milestones, Ndung’u said he had no idea, stating that this was another aspect of the business local shareholders were kept in the dark.