The Directorate of Criminal Investigations (DCI) is looking into the use of Sportpesa domains and paybill numbers by Milestone Games Limited as part of a fraud investigation, court documents have revealed,.
It is the latest twist in a messy fallout that came to the limelight after a failed attempt by Sportpesa to resume business in Kenya under a new Betting Control and Licensing Board (BCLB) license holder, Milestone Games.
BCLB blocked the partnership, and barred Milestone from using the Sportpesa brand, and its associated Intellectual Property (IP).
The fallout pits local shareholders in Pevans EA, Sportpesa’s holding company, against their foreign counterparts. According to Paul Wanderi Ndung’u who owns 17% stake in Pevans EA and 2.8% stake in Sportpesa Global Holdings Limited (SGHL), local shareholders were not informed of the deal.
Now, the DCI has secured orders compelling mobile service providers to reveal the owners of Sportpesa paybill numbers and shortcodes. In addition, they are to be furnished with financial statements on the money that has flowed into the paybill accounts since October 1, 2020.
“The board [the Betting Control and Licensing Board] is of the view that the said paybill numbers are being used in fraudulent gaming activities. We therefore request to conduct investigations as to how these paybill, USSDs and short codes were activated and transferred from SportPesa to Milestone Games Ltd.
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“The paybill numbers, USSD codes and short codes were activated and transferred from Pevans (SportPesa) to Milestone games fraudulently. The same are being sued to trade fraudulently even though the Betting Control and Licensing Board (BCLB) didn’t approve the licence for SportPesa,” a court application by the DCI read in part.
Local shareholders have maintained that the Sportpesa brand belongs to Pevans EA, with CEO Ronald Karauri accused of aligning himself with foreign shareholders to push the deal through.
Ndung’u had also claimed that local shareholders were excluded from purchasing shares in SGHL – diluting their ownership of the business.
SGHL owns the company’s gaming operations in Tanzania and Europe.
“SportPesa Global Holdings was a mirror of Pevans EA Limited. 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 UK Authorities,” his statement read in part.
Sportpesa’s short-lived return to the Kenyan market was seemingly hinged on Milestone being able to use the Sportpesa brand and access its database. Milestone had earlier informed BCLB in a letter that it had obtained permission from SGHL to use the brand.
BCLB, however, blocked the deal arguing that Pevans was the rightful owner of the brand.
It further noted that the application would remain on hold until the conclusion of a suit that would determine who between Pevans and SGHL owns the trade name.
“The BCLB are apprehensive that Kenyans are being defrauded by SportPesa and Milestone using numbers provided by Safaricom,” stated the Office of Director of Public Prosecutions (ODPP).
In a statement, Ndung’u also demanded answers on the transfer of millions of dollars from Pevans to various offshore accounts, stating that they would work with relevant authorities to trace the funds.
“After persistent push, the management report indicated that within three years Pevans has transferred over $250 million (Sh27.1 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 (Sh54.3 million) has been transferred from Pevans to SportPesa South Africa while another $17.5 million (Sh1.9 billion) has been transferred to Sportpesa Tanzania. We want to know who the beneficiaries of these accounts are,” he revealed in a statement.
SportPesa ceased operations in Kenya in 2019 citing the introduction of punitive tax laws.
At the time of its exit, Sportpesa was the most preferred gaming platform in the country. It also sponsored several sports teams and leagues in the country.
An announcement by Karauri of the company’s return had been met with excitement.
The subsequent move by BCLB to block the deal and the publicized fallout among shareholders has, however, put a dampener on hopes of the company’s return.