SportPesa’s faltering Kenyan relaunch erupts into shareholder row

The torpedoed Kenyan relaunch of SportPesa has degenerated into a bitter row between shareholders of the operator’s former and current parent companies, according to African media reports. SportPesa looked to have engineered a reversal of fortunes on 31 October when the operator announced it would resume Kenyan operations under the Milestone Games Limited moniker. However, those ambitions were wrecked on the same day after Kenya’s Betting Control and Licensing Board (BCLB) ruled the brand name could not be transferred as it was still owned by Kenyan operating entity Pevans East Africa Limited. Despite this, Milestone Games was granted permission to use the SportPesa name by international parent company SportPesa Global Holdings Limited, which holds the rights to the SportPesa brand until January 2027. The row centres around Pevans East Africa Limited which ceased operations in July 2019 following SportPesa’s licence revocation by the BCLB and its subsequent exit from the Kenyan market. Pevans shareholder and former chair Paul Wanderi Ndung’u told the Kenyan Star newspaper that Pevans shareholders were not informed of the potential comeback of the brand. “Just like the rest of the Kenyan public, I came to learn of the resumption of the SportPesa business through social media at 9pm on Friday,” Ndung’u said. Ndung’u further alleges that SportPesa CEO Ronald Karauri and international shareholders have been running SportPesa without consulting the Pevans board while partaking in financial misconduct in international markets. In addition, Ndung’u claims former Pevans shareholders were barred from buying shares in SportPesa Global Holdings Limited, as well as a share rights issue, which diluted the Kenyan shareholder’s influence in the business even further. “SportPesa Global Holdings was a mirror of Pevans East Africa Limited,” claimed Ndung’u. “However, within this year the foreign shareholders have fraudulently transferred the shareholding to themselves along with their associates and the matter will be handled by authorities,” he added. Of the 10 publicly identified shareholders in Pevans, five are Kenyan, holding 48% of the shares in the business. Three Bulgarian shareholders hold 26%, while shareholders from the US and UK hold a 21% and 5% share respectively. Ndung’u has asked the Central Bank of Kenya (CBK), the Financial Reporting Centre (FRC) and Kenya’s Revenue Authority (KRA) to investigate the matter further. SportPesa responded to the Ndung’u by threatening legal action, citing the “gravity and defamatory nature of the serious and utterly false allegations.” The operator further claimed that the company was fully compliant with all legal and tax requirements in the jurisdictions in which they operate. “SportPesa categorically denies the false and unsubstantiated allegations referenced by Mr Ndung’u and consequently, we are now exploring our legal options over such defamation. “We are not aware of any investigation by the United Kingdom Serious Fraud Office into SportPesa. Equally, Pevans East Africa has not transferred any such funds to offshore accounts.” “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. “SportPesa has ongoing and regular working arrangements with large auditing and tax advisory companies and any changes in the past to these relationships have been driven purely by commercial reasons,” a spokesperson for the operator added.