The complex ownership of SportPesa, Kenya’s largest sports betting platform, reveals a network of companies and individuals linked to controversies involving tax evasion, legal disputes, and potential conflicts of interest.
One of the key players in this web is Commtech Consortium Ltd, which is a major shareholder in Milestone Games Ltd, the company that now runs SportPesa.
Safaricom PLC, Kenya’s leading telecom company, also holds a 25% stake in SportPesa through Milestone Games.
This connection ties Safaricom to the growing betting industry, which has faced both legal and public scrutiny due to concerns over its impact on society.In 2019, Commtech Consortium Ltd took a significant step by acquiring a stake in Konvergenz Holding Company in a KSh 104 billion deal that also included Safaricom and another company called Apiero Ltd.
This gave Commtech more influence in the ownership of SportPesa.
As a result, Konvergenz now holds a 17.9% stake in SportPesa, further complicating the company’s ownership structure.
The complexity of the ownership does not end there.
Commtech Consortium Ltd is owned by employees of Hamilton Harrison and Mathews (HHM), a well-known law firm in Kenya.
One of the most prominent figures at this firm is Adil Khawaja, who is not only a managing partner at HHM but also the chairman of Safaricom PLC.
This creates a potential conflict of interest since Khawaja has roles in both a law firm linked to SportPesa and a telecom company that holds shares in the betting firm.
Two lawyers from HHM, Deborah Linet Ontiri and Peter Jr Okaalet, own 80% and 20% of Commtech, respectively.
This close connection between the law firm, Safaricom, and SportPesa raises concerns about how decisions are made and who truly benefits from the multi-billion-shilling betting industry.
These relationships have led to criticisms that SportPesa is using complex corporate structures to avoid transparency.
Some have argued that this setup may be used to hide true ownership and to engage in practices that could lead to tax evasion.
In fact, SportPesa has faced multiple legal challenges involving the Kenya Revenue Authority (KRA).
KRA accused SportPesa’s former parent company, Pevans East Africa, of owing billions in unpaid taxes. Pevans was also linked to a complex network of companies allegedly involved in tax evasion and money laundering.
In 2019, SportPesa was forced to shut down its operations in Kenya due to a dispute with KRA over a 20% excise tax on betting stakes.
The company argued that the tax was being applied unfairly to the entire betting amount, rather than just the winnings. Despite the shutdown, SportPesa returned to the market under Milestone Games Ltd, but the controversies have continued.
In addition to the tax issues, SportPesa has been involved in other legal battles, including claims of trademark infringement between Pevans East Africa and Milestone Games.
In 2022, the Betting Control and Licensing Board (BCLB) granted Milestone Games a license to operate under the SportPesa brand, sparking backlash from Pevans shareholders, who argued that they were unfairly excluded from the deal.
The ownership of SportPesa and its affiliated companies highlights a complex web of relationships, with links to legal firms, telecom companies, and the betting industry.
The controversies surrounding tax evasion, legal disputes, and potential conflicts of interest continue to raise concerns about the company’s operations and its impact on Kenyan society.
Add Comment