Embattled betting company SportPesa has resumed activity amidst a government probe and questions about its new shareholding structure that could in the coming days expose the skeletons in its closet.
Its Kenyan website was live on Tuesday and accepting bets despite a government threat to cancel its operating licences and scuttle its comeback.
Backed by a court order and fuelled by an intense desire to reclaim the top spot in Kenya’s lucrative betting industry, SportPesa appears highly determined to get back in the game.
It’s top officials are set to appear before the Betting Control and Licensing Board (BCLB) tomorrow (Thursday) to answer questions regarding the firm’s ownership and directorship.
The BCLB had on October 31 suspended the operating license of Milestones Games Limited for using SportPesa as its trade name, only for Lady Justice Pauline Nyamweya to overturn the ruling.
The reprieve was, however, short-lived as BCLB found out that among the shareholders of Milestones was SportPesa CEO Ronald Karauri, through several masked layers of ownership.
Apart from Mr Karauri, who is also a shareholder of SportPesa’s mother company Pevans East Africa, the other shareholder of Milestones is Francis Waweru Kiarie. That both Mr Kiarie and Mr Karauri have ownership stakes at Milestones, through Selenium Limited, is one of the issues set for discussion tomorrow by BCLB.
“The board views and considers the above actions of your company to be meant to circumvent the due diligence requirements and investigations that the board conducts while considering applications,” a letter to Milestones Limited by BCLB last week reads.
Still, even if SportPesa clears tomorrow’s BCLB hurdle, it must surmount the falling-out between its foreign and local shareholders, and an investigation by the Financial Reporting Centre (FRC) is waiting on the sidelines.
It is also not clear whether the four foreigners who were part of the founders of Pevans East Africa, SportPesa’s holding company, and who were deported last year, have a role in the re-organisation that has brought the firm back in operation.
As things stand now, Bulgarians Guerassim Nikolov, Valentina Nikolaeva Mineva and Ivan Kalpakchiev, and American Gene Grand are not allowed to operate betting companies in Kenya.
They, however, retain interests in SportPesa Global Holding Limited (SGHL), which operates betting companies with a similar name in Europe and Tanzania. Mr Nikolov founded the ill-fated Toto 6/49 lottery that sank without ever handing out a jackpot.
But even without its foreign shareholders, when you add a legal case pitting Pevans East Africa and the Kenya Revenue Authority, then the road ahead for SportPesa, Kenya’s most profitable betting company of all time, and which in its heyday boasted branding rights in the English Premier League through Everton FC, is still bumpy.
Sources within security circles have told the Nation that FRC is investigating claims of money laundering made by some shareholders of SportPesa.
One such claim was made by Mr Paul Kinuthia to the Central Bank of Kenya, and claims that some Sh26 million was at the end of last year transferred from Bradleys Limited without the knowledge of the directors.
Bradleys is a subsidiary of SportPesa that was behind the Pambazuka National Lottery. The lottery suspended operations in January 2018, citing heavy taxation.
“When we suspended operations, we preserved about Sh44 million to deal with some anticipated liabilities which included court cases by staff who had lost employment,” Mr Kinuthia informed CBK on December 30 last year.
“On December 24, and to my surprise, I received information from the chairman of the company that an equivalent of Sh40.9 million had been transferred from the Bradley account to Kentech SLU account in Las Palma, Canary Island, which is a tax haven,” he said.
Pevans East Africa has sued its former chairman Paul Ndung’u for defamation after he made similar claims of fraudulent transfer of money from the firm’s accounts.
