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Kenyan businessman Paul Ndung’u has challenged his expulsion from Sportpesa as a shareholder of Pevans East Africa, vehemently asserting that the decision made by his former colleagues lacks any legitimate legal basis.
The move by the Kenyan businessman follows a special resolution by Sportpesa CEO Ronald Karauri and other key stakeholders at Pevans East Africa that resulted in the removal of Ndung’u and Asenath Wachera Maina for their attempts to initiate legal proceedings against Pevans East Africa, the now-defunct holding company that introduced sports betting to Kenya through SportPesa.
Karauri, who announced the decision to oust the duo, 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.
In response, Ndung’u expressed his disappointment, stating that the meeting where he and Asenath Wachera Maina were expelled was not conducted in accordance with the Companies Act. “It was not properly convened and did not take place in Tanzania, as per the Companies Act,” he emphasized.
Through his legal representative Ekuru Aukot, Ndung’u cleared up any confusion surrounding the injunction imposed against him and Maina. He stated that, according to the law, the injunction had reached its expiration date on Jan. 24, 2023, and had not been renewed.
He also sought to clarify the requirements for the special resolution to pass, highlighting that it must receive the support of shareholders holding a minimum stake of 75 percent combined.
In 2019, Pevans East Africa was forced to close its doors after it lost its license due to allegations of non-payment of taxes in the amount of Ksh95 billion ($806.5 million) and growing concerns about the negative effects of gambling addiction.
SportPesa was then relaunched under Milestone, a group controlled by Karauri and other investors connected to Pevans East Africa. However, this move was met with legal action from former partners Ndung’u and Maina, who were the largest Kenyan shareholders in the defunct holding company.
They accused Karauri of conducting an illegal takeover through Milestone Games. Meanwhile, SportPesa shareholders who support the transfer of the brand to Milestone are advocating for Ndung’u and Maina to be disqualified from participating in legal proceedings and conducting business on behalf of Pevans.
