Economy

Lottery firm Pambazuka sues betting chiefs

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Extreme Sports boss Hussein Mohammed (left) and Sportpesa CEO Ronald Karauri at a past event. PHOTO | FILE

Gaming lottery Pambazuka has opened a legal battle against the industry regulator, seeking to quash President Uhuru Kenyatta’s appointment of the agency’s top managers.

Pambazuka through its parent company, Bradley Limited, wants the High Court to declare that the Betting Control and Licensing Board (BCLB) is not a State corporation and that its director, Charles Wambia, has no authority to issue directives to players in the bookmaking industry.

The battle has also offered an insight into the ownership of Pambazuka, as the gaming lottery has attached documents detailing its proprietorship.

Pevans East Africa Limited, which trades as SportPesa, owns a 60 per cent stake (6,000 shares) in Bradley — the entity that owns Pambazuka lottery. Pevans’ 60 per cent stake gives it a majority shareholding of Bradley. 

Nice and Lovely founder Paul Kinuthia is also listed as a director of Bradley. Mr Kinuthia, who sold his cosmetics firm—InterConsumer Products—to France’s L’Oréal in 2013 for Sh1.5 billion, has 150 shares in Bradley, giving him a 1.5 per cent stake in the Pambazuka lottery.

Shareholders include Extreme Sports founder Hussein Mohammed and former Nairobi Mayor Dick Wathika (deceased).

Pambazuka claims that government records show that Mr Wambia is a civil servant working for the gaming department of the Interior Ministry, and not as a member of the BCLB. It has also challenged the appointment of Liti Wambua as a member of the BCLB.

“Bradley later learnt that Mr Wambia is a civil servant appointed by the Public Service Commission to work in the gaming department of the Interior Ministry and is not a member of the BCLB and as such his act of writing letters on the BCLB letterhead is against the provisions of the Gaming Act and constitutes abuse of office,” Mr Mohammed argues in an affidavit filed in court.

READ: The multinational club of millionaires behind SportPesa

The gaming lottery also argues that Mr Kenyatta’s appointment of Francis Sang as a non-executive chairman of the BCLB was illegal as the post does not exist under the State Corporations Act.

Pambazuka adds that only the Interior Minister can make appointments to the BCLB and not the President.

“Liti Wambua was appointed by the President under the State Corporations Act as a non-executive chairman of the BCLB. Such a position does not exist under the Gaming Act and even if it existed a non-executive chairman has no authority to author letters on behalf of the BCLB. His appointment is illegal because only the minister has powers to appoint the chairman of the board,” Mr Mohammed adds.

The BCLB is yet to respond to the suit. Pambazuka’s owners claim that the BCLB is trying to sabotage a project in which they have injected more than Sh3.7 billion.

“Bradley is contracted to its software developer to the tune of Sh3 billion, being the software development right to use fee. Since the issuance of the original licence in 2010, Bradley has invested an estimated Sh700 million in the lottery and this excludes the brains behind the product,” Mr Mohammed holds.

Bradley says the Spanish developer that built Pambazuka’s software is to be paid Sh3 billion, and that it has spent more than Sh700 million in other aspects related to the lottery, including licences, salaries and premises.

The firm has spent Sh18 million to lease its premises for five years and six months, Mr Mohammed adds.

READ: House committee summons betting firms’ managers

The Bradley CEO says Pambazuka has been in the pipeline since 2010, and that it has always paid the annual Sh500,000 licence fee while developing the lottery.

The firm first moved to court in July to stop the BCLB from interfering with the Pambazuka launch.

Pambazuka has also asked the court to permanently stop Dr Sang’s appointment and declare that Mr Wambua and Mr Wambia have no authority to issue orders on behalf of the BCLB.

Bradley obtained a court order barring the BCLB from stopping Pambazuka’s launch, and has since successfully unveiled the lottery to the public.