Kenyan businessman Paul Ndung’u and entrepreneur Asenath Wachera Maina have been removed as shareholders of the now-defunct Pevans East Africa, the holding company that introduced sports betting to Kenya through the SportPesa brand.
At a general meeting held under a special resolution, Sportpesa CEO and shareholder Ronald Karauri announced that Ndung’u and Maina have been expelled as shareholders due to their actions of initiating court cases against the company — whose license was revoked in 2019 on allegations of tax evasion.
Karauri added that Pevans is facing a staggering Ksh14.3 billion ($114.7 million) in negative equity, which means that Ndung’u and Maina, who held 17 and 21 percent respectively in the now-defunct holding company – a combined 38-percent stake – will receive no compensation for their investments.
Ndung’u and Maina assert that in order for the special resolution to pass, it must receive approval from shareholders who hold a combined stake of over 75 percent.
With their own combined stake in Pevans amounting to 38 percent, they argue that the convening of the meeting has the support of shareholders holding a total of 40 percent of voting rights.
Pevans East Africa ceased operations in 2019 after losing its license for alleged non-payment of taxes totaling Ksh95 billion ($806.5 million) and concerns about increased gambling addiction.
The SportPesa brand was relaunched under Milestone, a group controlled by Karauri and other investors linked to Pevans East Africa prompting legal action from partners, most notably Ndung’u and Maina, the largest Kenyan stockholder in the defunct holding company, who accused Karauri of an illegal takeover through Milestone Games.
SportPesa shareholders who support the transfer of SportPesa to Milestone are petitioning to disqualify Ndung’u and Maina from representing Pevans in legal proceedings and conducting business dealings with the company.
Conversely, the pair have accused their former partners of engaging in unethical practices such as conflict of interest and betraying their trust by transferring ownership of the sports betting brand to Milestone.
