By Citizen Weekly
Fact: Some Directors of Pevans (EA) Ltd (PEAL), the company that owns the SPORTPESA brand, secretly arranged to move the gaming business and ownership of Sportpesa to another company by the name Milestones Gaming Ltd (MGL), which they co-own with members of the Kenyatta family.
The acrimonious and brazenly hostile takeover of the Sportpesa brand was meant to disenfranchise its 2 biggest local shareholders (Paul Wanderi Ndungu on one hand and Asenath Wacera {widow to co-founder Dick Wathika}) of their shares and leave them holding an empty shell of a company (PEAL).
This lunacy was occasioned by the unprecedented revenues that had been achieved by Sportpesa in the football seasons 2016 -2017 and 2017 -2018 where the brand helped rake in more than Ksh.150 billion in revenues in a single year. In those 2 years, Sportpesa became a mainstay revenue earner for Safaricom’s MPESA platform and made Sportpesa the 2nd most valuable brand in Kenya after Safaricom itself.
But that was not where the madness ended. With unprecedented revenues, some Directors of PEAL felt that paying their rightful taxes was way beneath them and they, therefore, set up off-shore companies through which to launder the money overseas by manipulating the laws in both Kenya and the UK.
The Kenya Revenue Authority (KRA) had been keeping a close eye on this company and its blatant under-reporting of revenues was flagged and action to recover the lost taxes commenced. It was a painful process, which would lead to long-drawn-out court cases and a multiplicity of overlapping court orders.
In 2019, at the height of this madness, which had been fueled by those unexpected revenues from a quantum leap in sports betting in Kenya, the Government had become fed up with the opaque operations of foreigners in the gaming industry and moved to restore sanity by withdrawing the Betting Control and Licensing Board (BCLB) permits for several top companies and deporting the foreign Directors of these companies.
Several Bulgarian Directors and employees of Sportpesa were arrested and thrown out of the country, and the BCLB license to Sportpesa was also withdrawn.
It was during this period of shock and uncertainty that a member of the Kenyatta family, Peter Kihanya, approached Sportpesa Directors with an offer that sounded irresistible.
Peter Kihanya proposed to Sportpesa (PEAL) Directors that due to his proximity and family ties with President Uhuru Kenyatta, he could muster sufficient influence to make the problems with both KRA and BCLB disappear.
Unbeknownst to some of the Directors, the negotiations with Peter Kihanya would deepen to the point where the proposal to help sort out the tax and other legal troubles for Sportpesa had transmogrified to a fully-fledged run on the mother company (PEAL).
The CEO for Pevans East Africa (and current MP for Kasarani constituency in Nairobi) Ronald Karauri, who had a minority shareholding in PEAL (6% only) saw an opportunity to increase his stake in the Sportpesa brand to unprecedented levels while escaping from the tax, legal and other problems, and leaving them in the laps of his co-directors and fellow shareholders in PEAL. A polite reminder that the media erroneously refers to Ronald Karauri as the CEO of SportPesa but the brand is owned by Pevans East Africa Limited.
FLASHY: The CEO of both Pevans EA & Milestone Gaming Limited.
Ronald Karauri did this by quietly partnering with the Kenyatta family through the aforementioned Peter Kihanya and James Ngengi Muigai (known to many simply as Jahmay) and changing the shareholding structure of an existing company by the name Milestones Gaming Ltd (MGL) and then working behind-the-scenes to move the Sportpesa short-codes, Paybill numbers and website domains from PEAL to MGL.
BCLB issued the gaming license to MGL on 26th October 2020 and on the 30th October 2020, MGL notified BCLB that it would commence operations and henceforth use the name Sportpesa, its short codes, domains, USSDs and Paybill numbers.
Ironically, the license issued to MGL was for the operation of the Bollywood casino and NOT for the running of sports betting on online platforms.
Such was the impunity with which MGL operated.
In the process of this changeover, the new company (MGL) had completely left out some key owners of PEAL, namely Asenath Wacera (widow to the late Dick Wathika – founder and Chairman) and Paul Ndungu (Billionaire investor by invitation).
Asenath and Ndungu were now left holding the short end of the stick in one hand, but also an empty shell of a company. In Kenya, a very misguided lot of citizens would say that Ronald Karauri had “kujipanga” which is slang to mean that he had cleverly maneuvered or outmaneuvered the other parties and placed himself in a pole position, from a minority position.
So who were the shareholders of Milestone Gaming Ltd?
Initial filings with BCLB showed that the shareholders of MGL were Nob Five Ltd with 99.5% shares and Wilson Ngatia Karunguru with 0.5% shares. Nob Five was then apparently owned by Selenium Ltd (96%) and the remainder 4% shares were held by Jackeline Nyambura Kungu.
Jackeline is a US-based member of the Kenyatta/Muigai family and related to the notorious Captain Kungu Muigai who in the recent past misused the Kikuyu Council of Elders for personal political gain in the run-up to the just concluded and also previous General Elections.
Kenyatta family kin Captain Kungu Muigai known for notoriously exploiting Kikuyu Council of Elders for personal gain.
Selenium Ltd was then owned by PEAL Chairman Francis Kiarie (43% {now deceased}) and Ronald Karauri (57%) who had 300 and 400 shares issued to them out of 10,000 shares available. Previously, Ronald Karauri and Francis Kiarie owned a mere 6% and 1% shares in Pevans (EA) Ltd, making them minority shareholders in the company that owned Sportpesa, without veto power.
In a classic case of hop-skip-jump, these two posers (Karauri and Kiarie) were now the majority shareholders in a company (Selenium) that owned majority shareholding in MGL, and that had transferred Sportpesa over to themselves in the process.
However, the BCLB having already issued a gaming license to MGL through its then Director, James Muigai Ngengi, a cousin to President Uhuru Kenyatta, fully expected that MGL was a stand-alone, brand new venture, and without knowing that the shareholding in the company had changed or that this would be the company that would be fronting the Sportpesa brand.
James Muigai Ngengi alias Jahmay is a well-known notorious character in Nairobi social circles, as the owner of “The Hood” restaurant which is situated somewhere behind Chaka Place in Hurlingham.
MGL had been formed on 24th September 2017 and its registered offices were at The Chancery on Valley Road, where the Kenyatta family has offices for the family business – Enke Investments Ltd.
The registered directors of Enke Investments Limited.
In July 2020, according to returns filed at the registrar of companies, MGL held a board meeting where shareholders James Muigai Ngengi and Peter Kihanya (relatives of President Uhuru Kenyatta) transferred their shares in the company to Ronald Karauri and Francis Kiarie in anticipation of the 2020/2021betting season.
In comparison to the MGL structure, the now disenfranchised Asenath Wacera owns 21% shares of PEAL while Paul Ndungu owned 17% shares, giving them a combined 38% stake in the company that owned and exponentially grew the Sportpesa brand from nothingness to the behemoth that it later turned out to be.
The question in everyone’s mind though is, how can Safaricom – a blue chip company by any stretch of the imagination – have acceded to the transfer of the shortcodes and paybill numbers belonging to PEAL over to MGL without a formal request from the former?
For example, wouldn’t a board resolution by PEAL be required alongside formal transfer agreements of these assets?
on 13th of July 2022, Uhuru Kenyatta awarded Enke Investments Director John Stuart Armitage a Head of State Commendation.
Had the Communications Authority of Kenya (CAK) been notified of the transfer of these shortcodes and Paybill numbers through Safaricom, from PEAL to MGL?
Once Safaricom learned of such discrepancies and attendant court cases, shouldn’t they have waited for the resolution of these matters before taking sides with MGL?
Fact. Safaricom is the biggest company in the East and Central Africa region with eye-watering revenue and even better dividends to its shareholders, many of whom are regular Kenyan citizens.
As the largest regional telco and company by revenue, Safaricom is the subject of plenty of scrutinies both official and unofficial. Its senior management is constantly in the eye of social media writers and regular journalists whenever they have a misstep.
However, Safaricom has always been plagued with scandal after scandal over the last 2 decades. The majority of the scandals have been centered around individuals.
Case in point, in 2001. At the inception of Safaricom, close associates and family of former President Daniel T. Arap Moi were granted share options by Vodafone. In 1999, in anticipation of the mobile phone boom in Africa, the Moi regime allowed Vodafone Kenya to purchase a 40% share in the state-controlled telecoms operator Safaricom, for the princely sum of $42 million.
The share options given to Moi and his family and allies were carried by Mobitelea ventures, and the explanation given to Vodafone shareholders was that Mobitelea gave Vodafone “advice and assistance” for securing the investment. By 2009, Mobitelea earned its owners upwards of Ksh. 5 billion which is staggering evidence of the success of Safaricom.
The inaugural CEO, Michael Joseph, knew all the skeletons in the closet and he reaped massively during his tenure. He would eventually buy massive land holdings in Lewa (Laikipia County) and has become a permanent fixture in various Government companies including as Chairman of National carrier –Kenya Airways.
To shore up the value of his land-holdings in the vast white-owned ranches of Kenya fraudulently-acquired by thugs of European colonial descent under the guise of “conservation”, Joseph launched the Lewa Marathon using the company to benefit his personal investments at a time when the public company arrogantly snubbed sponsoring national sporting assets like football and rugby.
Mobitelea would ultimately off-load its 2 Billion shares in Safaricom for Ksh. 6 Billion some years later and despite the United Kingdom’s Serious Fraud Office formal approach to Vodafone to enquire into Mobitelea, the company cited confidentiality and legal obligations as the reasons stopping them from disclosing such information.
Having set off on the wrong foot, it would appear that all senior managers at Safaricom also have one raison d’être, to strike a single deal each that would set them up for life.
It is the reason that Safaricom subscribers keep being hit with unsolicited premium services, forcing them to part with hundreds of millions of shillings annually to Premium Rate Service providers (PSPs) which are owned by the same Safaricom employees.
The immediate former CEO Bob Collymore fought a lone battle to keep Safaricom clean and there was a measure of sanity during his tenure, however, with his passing and the subsequent arrival of Peter Ndegwa, it is now all downhill.
All the major Safaricom-driven innovations are based almost exclusively on intellectual property theft from Fuliza (the borrowing service built on the overdraft system and which is a partnership with the Kenyatta-family owned NCBA Bank) to M-shwari (another mobile loan solution between Safaricom and the Kenyatta-owned NCBA bank) were all stolen from the innovators who fronted them to Safaricom in the first place.
When you first approach Safaricom with a novel idea, hoping to reap benefits from your innovation, they will usually present you with a non-disclosure agreement (NDA) for both of you to sign. Safe in the knowledge that you have an NDA in place, you would then spill your guts to Safaricom, who would in turn sneak off to the Kenyatta’s with the idea and you would helplessly watch as it is implemented as their joint innovation.
We have argued for the longest time that the Kenyatta brood are not the sharpest tools in the shed and they thrive on stolen ideas which they power through with money that was stolen from the Kenyan people in the first place. Even the 3rd generation of Kenyatta’s continue to show us their cluelessness and intent to follow the footsteps of their degenerate parents and grandparents, in believing that Kenya is theirs to strip down for parts. Puh!
BOSSOM BUDDIES: Sitoyo Lopokoiyit with former President Uhuru Kenyatta.
MGL became the latest venture involving the Kenyatta family, where they opted to take over the largest betting company by force.
Ironically, immediate former President Uhuru Kenyatta would preach ad nauseum about the ill effects of gambling and how youth were affected by over-borrowing on mobile phone platforms (like his Fuliza and M-shwari platforms) in order to bet. However, undercover he would orchestrate the hostile takeover of the biggest betting company in the region and yet owns the biggest mobile lending platforms in the region, which the same youth use excessively.
I mean…what does this man take us for?
On one hand, President Kenyatta would preach about the ills of betting, then proceed to close the biggest betting companies in Kenya and deport their foreign directors, then transfer their interests and assets (including loyal customers) to his own company MGL, and grant it all licenses with the other hand.
How then would Safaricom get involved in this nefarious and illegal scheme?
Remember that Safaricom has been involved in most of the legal cases involving PEAL and BCLB, and has won against Sportpesa in civil matter No.471 of 2020 at the Court of Appeal.
After dealing with PEAL and its Directors for 10+ years and watching PEAL and its Sportpesa brand become a mainstay of its revenues, how can Safaricom feign ignorance of who the real beneficial owners of PEAL are?
Safaricom took the exact same shortcodes and Paybill numbers from PEAL and granted them to MGL.
Heck, Safaricom knew that Ronald Karauri and Francis Kiarie were still Directors of PEAL even as they applied for the shift of the shortcodes and Paybill numbers to MGL.
Even more interesting was that Mr. Robert Macharia was a Director, Company Secretary, and legal officer for PEAL and had in the 10 years to 2021 already filed at least 25 cases in court against Safaricom, and was therefore well-known to them.
How then didn’t Safaricom find it unconscionable that Robert Macharia was now the legal officer for MGL? More importantly, why would Safaricom facilitate the transfer of Ksh. 2.3 Billion from the Paybills and Shortcodes owned by PEAL to MGL? And Safaricom did all these despite being well-served with High Court preservation orders and directions from the betting regulator BCLB.
We understand that one of the deported Bulgarian Directors of PEAL was flown into the country by private jet for an off-book meeting with Safaricom bosses and later had dinner with members of the Kenyatta Family to plan the hostile takeover of Sportpesa.
So what massive power is this that can move Safaricom to open illegality when they have Vodafone as a major shareholder? However, close family friends of the Karauri family tell us that the real reason could even be simpler.
Exclusive reports says that MPESA CEO Sitoyo Lopokoyit is married to Sportpesa CEO Ronald Karauri’s sister, creating the necessary nexus between the two brands and their maniacal maneuvers in the corporate landscape. Lopokoyit’s father was a long-serving Commissioner of Prisons under the regime of late President Daniel Arap Moi and his appointment was birthed from these historical ties between Moi’s son Gideon and Safaricom through Mobitelea.
Lopokpyit and Karauri also attended the same school (Mangu High School) and both were coincidentally offspring of Moi-era stalwarts, who were embraced by the vile and narcissistic dictator, benefiting from access to state coffers with no effort. It is this hard-wired mentality that was bequeathed to them by their late parents, giving them the audacity to engineer such a corporate heist with the brazenness and impunity of a dictatorial mindset.
Family ties always trump business ones and the desire to make Billions from other people’s ideas continues to hamstring corporate giants like Safaricom.
We will do a deep dive into the relationship between Sitoyo Lopokoyit and Karauri, Vodafone and Safaricom, and the Serious crime office in England and Sportpesa activities in subsequent articles
Source: Kenya-Today
