When the firm made Sh9 billion of pure, unadulterated profit, Peter Kihanya’s one percent translates to Sh90 million
By Idris ‘Shoes’ Lule
Uhuru Kenyatta, the businessman first with Presidency as side hustle, recently gave a sober nod for the return of betting firms. How convenient. Betting again on betting companies came after Uhuru’s second cousin, faceless businessman Peter Kihanya- also a member of his Boys’ Club- bought stakes in SportPesa, the Xanadu of betting in Kenya.
For over a year, Kihanya-who has no social media presence of any kind-has bought shares in SportPesa’s three international gambling firms, according to Finance Uncovered of the UK.
Kihanya bought one percent in Pevans East Africa which owns SportPesa in Kenya before closing shop last year. For starters, it coined Sh100 billion in 2018, according to Finance Uncovered. Kihanya’s one percent stake translates to Sh1 billion!
SportPesa CEO is Captain Ronald Karauri with a six percent stake. He clarified that they only made Sh20 billion in revenues of which only Sh9 billion was pure, unadulterated profit. Going by those figures, means Kihanya trousers home Sh90 million-from one arm of SportPesa-whose headquarters in Nairobi, share the same office complex as the Kenyatta family’s holding company!
Kihanya also bought a three percent stake in SportPesa (Isle of Man) Ltd, an offshore entity which pockets revenues from bets in the UK. The Isle of Man is a tax haven, so financial records are shielded from prying eyes.
Kihanya was on a roll after acquiring a 0.5 percent stake in SportPesa Global Holdings which controls betting outside Kenya in Tanzania, South Africa, Italy and Russia. SportPesa Global also owns IT services firm, SPS Sportsoft. SportPesa Global made Sh1.6 billion profit in 2018 meaning Kenya is the cash cow.
SportPesa and BetIn exited the Kenyan market after the Jubilee government introduced a punitive 20 percent tax on all bets and aggressively pursued payment to curb the gambling craze and shore up revenues for Almighty Caesar at the Kenya Revenue Authority.
The president has been generous with to family, assorted blood relations, friends and their acquaintances since his ascent to power in 2013
Uhuru Kenyatta assented to the bill that removed excise duty on betting stakes, signaling the return of SportPesa. And though Treasury CS Ukur Yatani has promised to “revisit” the removal in six months, the axing of the tax as it stands, means Peter Kihanya is another beneficiary of the “economics of affection” which the president has been generous with to family, assorted blood relations, friends and their acquaintances since his ascent to power in 2013.
Peter Kihanya is the elder brother of Kathleen Kihanya, the marketer who pioneered the art of branding sugar for marketing with wild success at Mumias Sugar. Today, sugar is not packed in brown paper bags, but wrapped in transparent packaging with corporate colours and taglines. From Mumias, Kathleen manned the Uhuru Kenyatta Centre at Chancery Building owned by the Kenyattas on Valley Road, Nairobi.
Unlike Mumias Sugar, it was a tough call packaging candidate Uhuru, then the ‘project’ of the late President Daniel arap Moi, for the 2002 presidential elections in which Peter Kihanya pumped millions in campaign funding. At the time, he was part of Data Logix, an IT firm which was awarded a Sh. 339 million tender by Kenya Pipeline- whose managing director, Dr Linus Cheruiyot, was given a Sh10 million bond, and used it well, fleeing to America at the height of the trial. Peter Kihanya and nine others were acquitted of fraud charges by the then Nairobi Chief Magistrate Aggrey Muchelule.
But Mwai Kibaki, now retired, won that year’s elections. Peter Kihanya’s sister became Uhuru’s PA and chair of Gatundu South CDF.
Kathleen would later benefit from the “economics of affection” when Uhuru won the presidency in 2013-the year she registered Sundales International alongside Nyokabi Muthama, Uhuru’s sister- who is also part of Koto Housing which has been winning police housing tenders. It was registered in 2014.
See, Peter and Kathleen’s mother, Margaret Wanjiru Kihanyas is President Uhuru’s first cousin since the late James Muigai, was the younger half-brother of Uhuru’s Old Guy, founding President Mzee Jomo Kenyatta. Margaret married Josphat Muiruri Kihanya, a career civil servant whose funeral service at the Holy Family Basilica, Uhuru attended in November 2016.
Josphat Kihanya was buried at Surrey Farm off Kenyatta Road where Banda Homes were erecting off-plan houses until Kathleen raised hell over ownership documents creating a kerfuffle with potential buyers in 2019.
“Economics of affection” is such proximity to power that sees one getting financial windfall from conflict of interest, nepotism and crony capitalism and as eminent economist David Ndii observed “Uhuru Kenyatta’s presidency has delivered remarkable returns-on-investment for the family enterprise” and removal of suffocating taxes to benefit Peter Kihanya, is one way, the other being tenders. And Kathleen Kihanya’s Sundales International was paid Sh41 million from supplying ‘emergency nutritional commodities’ to the Ministry of Health in 2016.
“Economics of affection” also includes landing jobs with state agencies as happened to Kathleen Kihanya. She was appointed member of Kenya Export Promotion and Branding Agency Board for a period of three years from 2019.
Asenath Wachera Maina has a 21 percent stake. She is the widow of Dick Wathika, former Mayor of Nairobi and Uhuru’s buddy
The other shareholders in SportPesa are also instructive. One is investment tycoon Paul Wanderi Ndung’u, the first Kenyan to get a forex bureau permit when he opened Taipan Forex in the early 1990s when still an accountant with Pioneer Assurance. Wanderi’s Mobicom, was for ages Safaricom’s largest countrywide dealer before shifting to Telkom Orange in 2010. By 2017, KRA had listed him among Kenya’s largest taxes payers-high net worthies whose annual income kissed the Sh1 billion ceiling.
Wanderi was the chair of Uhuru Kenyatta’s fundraising committee for the 2017 elections. Wanderi owns a 17 percent stake at SportPesa.
Then there is Asenath Wachera Maina with a 21 percent stake. She is the widow of Dick Wathika, former Mayor of Nairobi and Uhuru’s buddy.
The return of sport betting means it will no longer impoverish poor families and jobless youth who spent all their time in bed making “addictive predictions.” Betting losers, the government has finally realized the foolishness of its ways, will also not commit suicide. Interior Cabinet Secretary Dr Fred Matiang’i, who led the crackdown, this time last year hissed “betting does not help the economy” and instead, will “destroy the moral fabric of the country if left uncontrolled.” He has repeated the same thing but let’s wait and see whether Peter Kihanya’s bet on SportPesa ita ungua in six month’s time!