Wednesday, February 21, 2024

Exposed: How dirty money games rocked SportPesa

The dirty games that have been raging behind at SportPesa can be revealed. Apparently, Ronald Karauri is the major shareholder of Milestone Games Limited, the company behind the late 2020 controversial takeover of SportPesa. Karauri has also been the chief executive officer of SportPesa since the inception of the betting firm.

According to a report that appeared in the Business Daily recently, records at the Registrar of Companies show that Mr Karauri recently acquired a stake of 54.4 percent in Milestone through a series of investment vehicles. This makes him the majority owner in the new betting firm. Incidentally, he also owns a seven per cent stake in Pevans East Africa, which owns the SportPesa brand.

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“The bid to bring back SportPesa through Karauri’s Milestone (could leave) his partners in Pevans East Africa with a shell company,” the report in the daily business newspaper said.

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The report further said that records show that Karauri was joined in the new betting firm by Francis Waweru Kiarie, who has acquired an effective 40.9 percent stake in Milestone. Kiarie also owns a one percent stake in Pevans.

“With Pevans’ licence frozen over an unpaid tax bill of Sh. 15.1 billion, Milestone’s owners applied to the Betting Control and Licensing Board (BCLB) to operate the SportPesa brand in what would have given them access to a database of more than 12 million customers and valuable domains. The move would have also seen them avoid paying the taxes demanded on SportPesa operations under Pevans,” the report said.

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The revelations show that Karauri and Mr Kiarie own Milestone through a chain of two investment vehicles that were identified as Selenium Limited and NOB Five Limited. “Karauri owns a 57.1 percent stake in Selenium Limited that has a 96 percent interest in NOB Five, which in turn holds a 99.5 percent equity in Milestone. He is listed as a director and shareholder of Selenium. Kiarie on the other hand has a 42.8 percent stake in Selenium, leading up to an effective interest of 40.9 percent interest in Milestone,” the report said.

SportPesa owners under the Pevans East Africa company are having a bitter dispute over billions. The fight has local owners Paul Ndung’u and Asenath Wacera on one side and SportPesa’s Bulgarian owners with Ronald Karauri on the other side. At the heart of this fight is the allegation that Sh. 29.1 billion was transferred from the company’s accounts to overseas accounts without the approval of some owners.

Ndung’u owns a 17 percent stake in Pevans and 2.8 percent of SGHL while foreign owners led by Bulgarians own 80 percent of SGHL 47 percent in Pevans. Karauri owns a six percent stake in Pevans East Africa while Wacera owns 21 percent stake in Pevans. Peter Kihanya Muiruri, a cousin of President Uhuru Kenyatta, owns a one percent stake. American Gene Grand owns 21 percent, Bulgarians Valentina Nikolaeva Mineva three percent and Ivan Stoyanov Kalpakchiev two percent.

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“After persistent push, the management report indicated that within three years Pevans has transferred over $250 million (Sh. 27.1 billion) to various offshore accounts in Isle of Man, Dubai and Las Palmas/Canary Islands. Shareholders have also come to learn that subsequent to ceasing operations, $500,000 (Sh. 54.3 million) has been transferred from Pevans to SportPesa South Africa while another $17.5 million (Sh. 1.9 billion) has been transferred to Sportpesa Tanzania. We want to know who the beneficiaries of these accounts are,” a letter by Ndung’u says.

The can of worms on SportPesa was opened by investigative journalism site Finance Uncovered. This site revealed that Pevans and its owners were using complex financial arrangements to shift billions of shillings outside the country while paying less taxes in Kenya.

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