Affluent investors of SportPesa have had an argument over allegations of transferring KES29.1 billion from the company’s financial assets to overseas accounts and sale of some shares in the owner of the gambling operator.
The shareholder disagreement in the Kenyan sports betting operator is setting local majority shareholders in conflict with the company’s foreign Bulgarian owners – Guerassim Nikolov, Ivan Kalpakchiev and Valentina Mineva. The argument started at the time when the gambling firm officially announced its return under Milestone, a business that was given an operating license in October.
The owners of a combined 38% stake, Asenath Wacera Maina and Paul Wanderi Ndung’u, insist they were not informed about the deal with Milestone, which was officially announced by Ronald Karauri, CEO of SportPesa, on October 30th. Mr. Ndung’u claims that local top investors of Pevans East Africa, which is the Kenyan owner of the sports betting company, were not included in the share purchase in the holding company, SportPesa Global Holding Limited. As he explained, the exclusion led to a dilution of their ownership in the company.
Currently, Sportpesa Global owns gaming businesses in Europe and Tanzania. Recently, the company also claimed to be the owner of the SportPesa brand, a move that fuelled protests from a group of local investors led by Mr. Ndung’u, according to whom that trade name and betting brand is property of Pevans East Africa.
Now, the disagreements threaten to break the six-year partnership of affluent and politically influential Kenyan and Bulgarian investors that helped the establishment of SportPesa, which has been generated a huge fortune from its online betting offering in Kenya.
Kenyan Investors Want to Know Where Millions Had Been Transferred To
As revealed at the time, the deal with Milestone was agreed on the condition that the brand belonged to SportPesa Global Holding Limited, rather than to Pevans East Africa, which in 2019 was suspended from operating in the Kenyan market because of tax issues. Milestone had indicated to the local regulatory body that SportPesa Global Holding Limited had given it permission to use the SportPesa trademark. Its move to the acquisition of the gambling operator’s brand and platforms could give it access to a customer database of more than 12 million user accounts.
Kenyan shareholders shared their concern with the deal, which was blocked by the country’s gambling regulators on October 31st.
According to reports, the company’s Bulgarian owners held 80% of SportPesa Global Holding Limited in January. They currently own a 47% stake in Pevans East Africa.
Mr. Ndung’u, who holds a 17% stake in Pevans and a 2.8% stake in SportPesa Global Holding Limited, made some revelations regarding the investor disagreements that date back to 2017. Yesterday, he released a statement, accusing Mr. Karauri of having joined forces with the foreign investors in the firm to operate the sports betting platform without discussing any issues with the board and local shareholders.
Ms. Maina, a shareholder that owns a 21% stake in Pevans, called for a forensic audit on the company starting from 2015. The proposal has been rejected for now.
Mr. Ndung’u revealed that, according to the management report, more than KES27.1 billion had been transferred from Pevans to a number of offshore accounts in Dubai, Isle of Man and Las Palmas/Canary Islands in a period of three years. He further noted that shareholders had learned about after ceasing operations, a total of KES54.3 million has been transferred from Pevans to SportsPesa South Africa. A further KES1.9 billion had been transferred to SportPesa Tanzania, Mr. Ndung’u explained.
The local investor said that he and his fellow shareholders are willing to see who were the beneficiaries of the transactions. He said that they intend to address the Financial Reporting Centre (FRC), the Central Bank of Kenya (CBK) and Kenya Revenue Authority (KRA) and ask them to provide more details about the ultimate destination of the money transactions.
