The protracted legal battle over Kenya’s biggest betting brand, SportPesa, has loomed over the country’s fast-growing gambling industry for nearly five years.
What began as a private shareholder dispute evolved into a far broader contest, surfacing uncomfortable and instructive lessons on corporate governance, the exercise of corporate power, and limits of litigation as a business strategy.
It also replayed a familiar pattern in high-value commercial disputes: forum shopping—seeking a more favourable jurisdiction once domestic avenues are exhausted.
In an industry that has become one of Kenya’s largest commercial sponsors of sport, a major contributor to the Sports, Arts and Social Development Fund, and a key financier of national projects such as Talanta Stadium, stability of its leading operator was never merely a private concern. It went to the financial health and credibility of the entire sector.
When control of SportPesa was destabilised through prolonged litigation, the effects rippled far beyond shareholders—to clubs, federations, and public projects dependent on betting-derived revenues.
Gambling has become one of the largest private funding pipelines for sports development, channelling statutory levies into the Sports Development Fund and underwriting sponsorships the public sector cannot finance on its own.
The genesis of the saga lay in the transfer of the SportPesa brand. Mr Paul Wanderi Ndungu prosecuted his case with zeal before the Kenya Industrial Property Institute (KIPI), the Directorate of Criminal Investigations (DCI), and the courts, alleging that the brand had been fraudulently transferred to a new entity, Milestone Games Limited, through forgery.
He did not stop at litigation. Court records reveal an aggressive lobbying directed at the Presidency, the Cabinet Secretary for Interior, the Betting Control and Licensing Board (BCLB), and even Safaricom. Regulators were petitioned, executives accused, and State institutions drawn into what amounted to a sustained reputational siege.
In letters heavy with conspiracy theories, Mr Ndungu alleged that regulators and chief executives of reputable companies were colluding to facilitate “tax evasion” and “money laundering”. These allegations, however, were never proved in court.
In 2022, a Nairobi High Court delivered the first decisive blow to this narrative. Justice A.K. Ndungu affirmed Milestone Games’ lawful right to use the SportPesa trademark and dismissed claims of fraud and forgery.
The court found that the due diligence and administrative processes undertaken by the Registrar of Trade Marks were valid. Legally, the story of the “stolen brand” was laid to rest.
But the dispute did not end there. With domestic remedies exhausted, the battle shifted to the United Kingdom, recast as a shareholder oppression claim. Mr Ndungu argued that capital raises at SportPesa Global Holdings Limited were designed to unlawfully dilute his stake.
The UK High Court’s response is instructive for industry participants. The court assessed the capital raises not as abstract governance questions but within their commercial context: a company under financial strain seeking survival capital. It found the transactions justified, necessary, and lawful.
Crucially, the court observed that Mr Ndungu lacked the financial capacity to participate meaningfully in the capital raises. That finding reframes the dispute entirely. This was not exclusion from ownership; it was an inability to fund ownership.
Was this vexatious litigation? The scale and nature of the costs order suggest the court thought so. An interim costs award running into hundreds of millions of shillings is not routine. It reflects a judicial conclusion that the litigation imposed disproportionate cost and disruption without merit.
For industry players, the signal is clear: courts—particularly in mature commercial jurisdictions—are increasingly unwilling to indulge litigation deployed as a competitive or coercive weapon.
The case also offers a pointed lesson on forum shopping. Moving disputes across borders does not rehabilitate weak claims; it exposes them to stricter scrutiny. Jurisdictional arbitrage has limits.
Are there lessons on corporate governance? Unequivocally. For boards, regulators, and investors, the SportPesa saga underscores several hard realities. First, documented process matters. Both the Kenyan and UK courts relied heavily on paper trails—board resolutions, regulatory filings, and capital-raising records.
Second, capital is control. Shareholding rights in capital-intensive industries cannot be preserved through litigation alone. They must be defended by the ability to fund growth and weather distress.
With the litigation now effectively settled, SportPesa’s renewed investments—more than KSh 1.12 billion in league sponsorships and major commitments to rugby and national sports events—signal an industry reset. This is less about corporate vindication than the restoration of market normalcy.
In the end, the courts affirmed a simple but unforgiving principle of modern corporate life: ownership is sustained not by narratives or pressure, but by evidence, process, and financial commitment.
The writer is a former managing editor of The EastAfrican.
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