Former SportPesa chair loses shares battle in London

A court in London has dealt SportPesa shareholder Paul Wanderi a major blow after finding that there was no fraud committed or a conspiracy by other directors and shareholders to reduce his interest at SportPesa Global Holdings Limited (SPGHL).

Wanderi, who has been in a series of court battles over the ownership of the betting giant, had sued SPGHL and the firm’s directors and shareholders—Ivaylo Petev, Kalina Lyubomirova, Guerassm Nikolov, Gene Grand and Naogen Investment Inc—accusing them of conspiring to illegally dilute his stake. The billionaire also accused them of alleged forgery, which they denied.

However, Justice Edward Johnson found that Wanderi’s claims could not stand as he had not shown that the affairs of the betting firm were being run to his disadvantage. Justice Johnson further said the alleged scheme claimed by Wanderi never existed. Instead, the court found that the dilution of the shares was a result of mitigating a financial threat to the company.

“I conclude, for the reasons which I have given, that the claimant has failed to demonstrate that the affairs of the company have been conducted in a manner which was unfairly prejudicial to the interests of the claimant. More specifically, the claimant has failed to establish that there has been any conduct of the affairs of the company which has caused him to suffer prejudice, in his capacity as a member of the company,” ruled Justice Johnson.

In the case, Wanderi told the judge that he held a 17 per cent stake at SPGHL. He alleged that through three allotments between 2019 and 2022, his shares were reduced to 0.85 per cent. He accused Petev and Lyubomirova of hatching a scheme of reducing his shareholding, something which he claimed was backed by Nikolov, Grand and Naogen.

SPGHL was incorporated on March 21, 2017, and registered in England and Wales. Justice Johnson observed that the betting firm’s principal shareholders were Wanderi with 17 per cent, Nilokov who had 21 per cent, Grand (22 per cent), and former politician Dick Wathika’s widow, Asenath Wachera (21 per cent).

SPGHL’s subsidiaries were SPS Sportsoft Limited and SportPesa companies operating in Tanzania, South Africa and Russia. In Kenya, Pevans East Africa Limited was incorporated to carry out the same betting business. Then there is the Isle of Man Group, which is based in the self-governing British nation.

The battle, according to the judge, surrounded Pevans, with Wanderi and Wachera being on the same side of the divide. The Kenyan firm was the heart of the global business and its golden goose. It emerged that when Pevans became embroiled in a tax battle with the Kenya Revenue Authority (KRA), the case had a ripple effect on the SportPesa global operations. The judge heard that owing to the crisis, the UK holding company decided that the only option was to generate funds from its shareholders.

In the case, Justice Johnson said that the first and second capital raises were justified as the company needed to stay afloat to operate. Wanderi’s main issue revolved around how he was notified about the first and second offers. He alleged that the offers were made behind his back. However, the judge was of the view that there was no evidence to show that the directors had authorised sending the notices through DHL or the unspecified email address.

The High Court judge also found that Wanderi’s issue was not about his confidence in Petev and Lyubomirova at SPGHL. He noted that there was evidence to show that he was not involved in the day-to-day running of the UK firm.

“In summary, I find that the claimant did not lose confidence in the management of the company, as alleged in Ground 11,” he said.

Wanderi had also sought compensation in the case. Nevertheless, Grand and Naogen argued that he would not have suffered any loss because the shares in the company had no value on the dates when he would have subscribed.

Justice Johnson said that Wanderi could not prove that he would have subscribed in response to the third capital raise owing to the long-standing rift in the business between 2019 to 2020 and December 2021. He said that there was nothing to show that SPGHL was being run contrary to his interests.

“I conclude, for the reasons which I have given, that the claimant has failed to demonstrate that the affairs of the company have been conducted in a manner which was unfairly prejudicial to the interests of the claimant. More specifically, the claimant has failed to establish that there has been any conduct of the affairs of the company which has caused him to suffer prejudice, in his capacity as a member of the company,” said the judge.