Two Kenyan Sportpesa shareholders, Paul Wanderi Ndung’u and Asenath Wacera Maina, are counting losses after being edged out of the business.
The two have seen their wealth in Sportpesa erode by over Ksh1.1 billion, following a right issue conducted between 2019 and 2020.
The two refused to participate in the rights issue following a fallout with other shareholders, even as money laundering allegations mounted against SportPesa Global Holdings Limited (SPGHL) and Pevans East Africa.
Pevans was the company that ran the Sportpesa brand in Kenya, before the company left the Kenyan market only to come back under the banner of Milestone Games Ltd in 2020.
SPGHL runs SportPesa subsidiaries operating in Italy, Tanzania, South Africa and Russia.
Mrs Maina, the widow of former Nairobi Mayor Dick Wathika, saw her stake in SPGHL shrink to 1.9 percent in January 2020 from 21 percent in March 2017.
In terms of money and assets, Mrs Maina’s stake now stands at £417,763 (Ksh62.6 million), a drop from £4.5 million (Ksh689.3 million). This equals to a wealth erosion of £4.1 million (Ksh626 million)
On the other hand, Ndung’u’s stake in SPGHL dropped to £338,189 (Ksh50.7 million) from £3.7 million (Ksh558 million), resulting in a loss of £3.3 million (Ksh507.2 million).
SPGHL’s book value stood at £21.8 million (Ksh3.2 billion) in the year ended December 2018.
In a June 2020 letter to Ivaylo Bozoukov, a director of SPGHL, Ndung’u argued that the rights issue was not procedural and was not in good faith or good intentions.
“I still hold it that as per my email below that the original rights issue was not procedural and was not in good faith or good intentions, even the pricing done was to dispossess certain shareholders by giving over 99.5 percent discount on fair net value per share as per the issue date,” wrote Ndung’u as quoted by Business Daily.
Ndung’u had been asked to pay £170,000 (Ksh25.5 million) to an escrow account in the Isle of Man, which was suspicious.
Other shareholders who participated in the rights issue saw their stakes increase substantially at the expense of the disgruntled shareholders.
Guerassim Nikolov’s stake increased by Ksh453.2 million after paying Ksh55.7 million, with his stake hitting Ksh1 billion from Ksh721.5 million.
Ronald Karauri paid Ksh15.1 million and gained Ksh91.9 million.