It is now no longer a secret that several Directors of Pevans (EA) Ltd, the company that owns the Sportpesa (SP) brand had illegally disenfranchised its biggest shareholders and moved the SP brand to another company by the name Milestones Gaming Ltd.
They did this by clandestinely shifting the Sportpesa brand, its short codes, paybill numbers, and domain names to Milestones Gaming Ltd and then acquiring a sports betting license independently from the BCLB so as to continue the business.
Milestones Gaming Ltd is owned by former Pevans (EA) Ltd CEO and now Kasarani MP Ronald Karauri together with thuggish (deported) Bulgarian Nikolov Gerassim on the one hand and the members of the Kenyatta family, who hold shares in the company through proxies.
In turn, the biggest shareholders of Pevans (EA) Ltd namely Billionaire Paul Ndungu and Asenath Wacera Maina, the widow to founder and former Chairman Dick Wathika were left holding an empty shell of a company after they had invested Billions into a nascent idea when absolutely nobody else would.
This was the clearest manifestation of a hostile takeover in Kenyan corporate history, done with the brazenness and clumsiness that only the first family could muster.
Initially, the Kenyan betting regulator, the Betting Control & Licensing Board (BCLB) canceled the license issued to Milestones Gaming in December 2020 after it realized that the shareholding of the company had changed quietly behind the scenes after the BCLB had cracked down on rogue betting companies and their Directors (including Pevans {EA} Ltd) shadowy Directors Nikolov Gerassim a year earlier.
Pevans (EA) Ltd had also been hit by the Kenya Revenue Authority for up to Kes. 95 Billion in taxes after some of its Directors transferred Billions to a UK-based company using an old tax law that allowed them to claim double-taxation benefits in the UK, a law that is a throwback of the colonial system.
By claiming that they had paid taxes in Kenya (excise, withholding, and other taxes) they were allowed to repatriate 10’s of Billions of shillings to the UK. Another trick that they used was to incorporate a company in the UK and claim that this company was the owner of the proprietary technology in the betting software, and in turn, paid it Billions of shillings in licensing fees annually for between 5-6 years.
This gave rise to massive penalties and interest that boggled the minds of many Kenyans who wrongly assumed that KRA was on a political witch-hunt of their beloved local brand and sports supporter.
Kenyans were mesmerized by the Sportpesa brand for sure, those guys became the only company in known history to go out sponsor an English Premier League (EPL) side, in this Everton FC before the deal fell through two whole years before the contract ended after English authorities uncovered the tax evasion and money-laundering schemes by Sportpesa brand.
This led to massive hue-and-cry in the British Parliament, amid concerns that Sports betting was having an adverse effect on millions of youth who had become addicted to it and were spending all their resources on it daily.
In Kenya, the legal system becomes a veritable playing field for the disputes between the parties including BCLB, KRA, MGL, Pevans, and individual Directors.
Just last week, The High Court of Kenya (Judicial Review Division) granted prayers by disenfranchised Pevans (EA) Ltd Director Asenath Wacera Maina, which included allowing her to institute proceedings against BCLB and Milestones Gaming Ltd (MGL).
The orders granted to Asenath would also act as a stay on the activities or licensing of MGL.
In layman’s terms, the Judicial Review division had considered Asenath’s application against the two parties (BCLB and MGL) and found that it merited further ventilation at a substantive court hearing.
Asenath had first to seek the leave of the court to file the substantive case against BCLB and MGL, and this application for leave is meant to weed out frivolous, vexatious, or hopeless applications and that the case proceeding to full hearing was fit for further consideration.
In Asenaths application, she had presented evidence that MGL had been granted a betting license No. 448 and been allowed to trade as SPORTPESA.
The Hon Justice Anthony Ndungu of the High Court also allowed the decision to grant MGL a license to operate as Sportpesa by the BCLB to be stayed (stopped) until the matter was heard and determined by the courts.
This effectively means that for the foreseeable future, there should be no betting activity by Sportpesa and the BCLB should recall the license issued to MGL.
This last week, it was surprising to note that Sportpesa went ahead and signed a one-year shirt sponsorship deal with KPL giants Gor Mahia.
In their minds, MGL erroneously believes that the stay granted by the High Court is perfunctory or that the matter filed at the High Court by Dick Wathika’s widow is a ‘passing cloud’.
We wait to see what legal abracadabra that MGL will pull out of their hat now.
Previously, MGL had sued BCLB on 9th November 2020 following what can arguably only be referred to as a corporate ambush 10 days earlier. MGL, which had no known association with Sportpesa by then, and had already been granted a betting license no. 0000205 earlier that October suddenly informed the BCLB that it would henceforth trade as SPORTPESA.
The license granted to MGL by BCLB in October 2020 allowed them to trade as “milestone bets” only.
Suddenly, with no indication of how the ownership of MGL had changed in the preceding month, it advised BCLB that it would henceforth use Sportpesa Paybills 521521, 955100, and 955700. They also told BCLB that they would also now be using the shortcodes 29050 and 79079 for their operations.
BCLB, then Chaired by former no-nonsense PC Cyrus Maina immediately swung into action and suspended MGL’s license 000205 immediately for flouting the Kenya Information and Communications Act which governed the transfer of Paybills and shortcodes between licensees.
MGL reacted by filing a civil suit at the High Court HCCJRC No. E061 of 2020 (Republic vs BCLB) with MGL ex parte and Pevans (EA) Ltd as the interested party.
Shockingly, the Directors of MGL who signed the resolution to institute the court proceedings were Ronald Karauri and Robert Macharia, who were also Directors of the same Pevans (EA) Ltd that they were now suing.
You can’t make this stuff up!
It didn’t end there, because apparently it became known to the BCLB that the beneficial ownership and shareholding of MGL had changed quietly, with no notification to the betting regulator.
The law required that such a change in the shareholding of a licensed company be made abundantly clear to the BCLB beforehand in order to allow the regulator to conduct independent due diligence on the new shareholders and Directors through the relevant Government agencies.
Apparently, this would have been highly inconvenient to the Directors of MGL because one of them had already been deported for criminal activities and was moonlighting on a yacht off the coast of Dar es Salaam.
This Director, Gerassim Nikolov, a former casino owner in Nairobi and the promoter of the numbers game Toto 6/49 was now the puppet master from the net door country where Sportpesa operations and marketing continued after Kenya withdrew their gaming license.
On 4th December 2020 the MGL Directors including Ronald Karauri attended a show cause meeting at BCLB to try and explain away the glaring irregularities. They were unable to convince the BCLB and on the same day 4th December 2020, their betting license was formally (not provisionally) canceled.
But the real gravy was elsewhere.
Remember that MGL had filed a civil suit E061 of 2020 Republic vs BCLB (with MGL exparte and Pevans EA Ltd as an interested party) on 9th November 2020.
In a bid to stop the show cause hearing at the BCLB, MGL filed for orders on 2nd December 2020 to compel BCLB not to convene the meeting.
A court process server by the name Bernard Chauro claimed in his affidavit of service filed in court that he had served the court order on the evening of 3rd December 2020 on the night before the show cause meeting.
Obviously, the show cause meeting went ahead and the decision to formally withdraw the MGL license was made. MGL, now claiming to have served the court order barring the BCLB from conducting the show cause hearing now went back to court to seek orders of contempt of court against individual Directors of the BCLB.
By relying on an affidavit of service that has since been found to be false and the perjured evidence of Bernard Chauro, Lady Justice Pauline Nyamweya found BCLB Directors Cyrus Maina (Chairman), Sabrina Kanini, Peter Kanaiya, Daniel Koech, Joy Masinde, and Peter Mbugi to be guilty of the charge of contempt of court.
Court order stopping BCLB show cause meeting and issued & served on 4thDecember 2020
This is a criminal conviction that unless vacated by a higher would stain their lives and public service forever.
However, herein lies the rub…
Excerpts of the ruling by Justice Pauline Nyamweya clearly show the brazen attempt to falsify, forge and amend the record to arrive at a pre-determined outcome.
In her contempt of court ruling, Justice Nyamweya states that the application for orders barring BCLB from holding the show cause hearing was filed on 2nd December 2020 and that the Registrar issues the orders formally on the morning of 4th December 2020, at the exact same time that the BCLB was holding its meeting. Clearly, this Bernard Chauro lied…
Even worse is the fact that the application for an order was filed and received by the High Court registry on 3rd December 2020 (and not 2ndDecember 2020) and that Justice Pauline Nyamweya had deliberately omitted this in coming up in her ruling.
Official filing receipt by MGL lawyers showing that application was filed on 3rd Dec and not 2nd Dec 2020
Official filing receipt by MGL lawyers showing that application was filed on 3rd Dec and not 2nd Dec 2020
Why would a Judge of the High Court backdate an application in order to find the Directors of the Government agency guilty of contempt?
The court process server Bernard Chauro apparently used the BCLB email address to serve them the court order on the 3rd of December 2020 yet the same order was only released after signature by the registrar on the 4th of December 2020.
Even the same court order that was issued on 4th December 2020 and served on the Communications Authority of Kenya seems to have been stamped “RECEIVED” on 3rd December 2020.
Same court order with 2 different service dates and used in contempt of court case against BCLB Directors
Clearly, these orders were important to MGL to the extent that they were happy to backdate, falsify and swear false affidavits/commit perjury to get the contempt ruling against the BCLB Directors.
To date, the State Law Office (Attorney General’s office) has not pursued the appeals for the BCLB Directors in the contempt ruling despite having defended them successfully upto the court of appeal in another matter where Pevans (EA) Ltd had sued them for withdrawal of their Sportpesa license in 2019.
In fact, despite clear wins by the AGs office in the Pevans (EA) Ltd case versus BCLB all the way to the court of appeal and despite almost similar circumstances between Pevans and MGL, the AG never once introduced the rulings of both the High Court and Court of Appeal to the case E061 of 2020 of Republic vs BCLB.
In fact, AGs office has been trying to reach an out-of-court settlement with MGL when they can easily crush them in court by asserting the same strong legal arguments that they used very effectively earlier against Pevans (EA) Ltd.
Isn’t this odd?
But to cap it all, did the MGL lawyers (Otieno Ogola & Co. Advocates) issue a Notice of Penal consequences to the BCLB with the full court of arms of the Republic of Kenya on 7th December 2020?
Notice of penal consequences issued by MGL lawyers and not the High Court
Notice of Penal consequences almost always comes together with the orders of the court, often inscribed at the bottom of the court order.
However, the notice of penal consequences is the exclusive preserve of the Kenyan courts and cannot, therefore, be issued by a law firm.
Worse, why would a law firm arrogate itself to the duty of the courts and the use of High Court format and Government symbols of authority?
Did MGL, by the fact that they are owned partly by the Kenyatta family, seemed not to differentiate themselves from Government?
What is it about the MGL and their need to ride roughshod over everyone in order to continue the gaming in Kenya, by fair means or foul?
We are familiar with Lady Justice Pauline Nyamweya, whom we first heard of after she granted orders for the payment of Ksh. 80 Billion in a fake Ruaraka land compensation claim by the now-broke Billionaire land-grabber Francis Muigai, with emasculated and soon to be evicted Interior Ministry Cabinet Secretary Fred Matiangi who has engineered this entire Sportpesa Charade, playing a prominent role in the scandal.
At some point her exploits were so brazen that she had to be moved from Nairobi to Machakos stations, only to be brought back to Nairobi when her tribe-mate David Maraga took over as Chief Justice in Kenya.
There really is nothing that this woman would not do for the coin, is there?
