Ken Nyagudi (right), a director of Amaya Gaming’s Kenyan subsidiary. FILE PHOTO | NMG
Little-known charity Lion’s Heart Self Help Group’s David vs
Goliath battle against the world’s largest publicly listed online
gambling firm, Amaya Gaming Group, over alleged embezzlement of aid
funds has piled more misery on the bookmaker, while sucking in NIC Bank
.
Lion’s
Heart has sued Amaya’s local subsidiary in a bid to recover Sh73
million it claims was embezzled by the gaming firm’s officials, David
Baazov, Daniel Sebag and Benjamin Ahdoot with the help of NIC, which
allowed them to open accounts that were used to siphon the cash meant
for aid.
The charity has sued alongside one of Amaya’s
directors, Kennedy Odhiambo Nyagudi. Amaya is yet to respond to the
suit. Amaya kicked off its operations in Kenya in 2010 with the M-Lotto
sweepstake and later introduced the Kwachu 6/48 Lotto.
Documents
filed in court indicate that the firm was to donate 25 per cent of its
earnings to Lion’s Heart, which the charity group now holds did not
happen.
The suit comes as Amaya’s founder, Mr Baazov,
is fighting charges of insider trading in Canada. Insider trading is the
buying or selling of a security by someone who has access to material
nonpublic information about the security.
The charges
lodged by Canadian authorities came after Amaya’s purchase of rival
firm, the Rational Group for a reported $4.9 billion (Sh505.9 billion).
The
buyout saw Amaya become the world’s largest listed online gambling
firm. Mr Baazov, the 37-year-old that was once described by Forbes as
the king of online gambling, was forced to step down as Amaya CEO in
August last year following the charges in Canada.
The inquest in Canada later prompted US investor David Weisman
to lodge a class action suit against Amaya, which he says should have
revealed to the public that its CEO had been implicated in an insider
trading case.
Mr Weisman says in suit papers filed
before the US District Court in Manhattan, New York, that by staying
silent on the charges facing its CEO Amaya had defrauded shareholders.
Mr
Nyagudi now claims that Mr Baazov, Mr Sebag and Mr Ahdoot secretly
opened four bank accounts at NIC, which were used to keep channel money
earned from Amaya’s operations out of the country and away from the
reach of Lion’s Heart.
“NIC Bank received the funds
from the lotteries through deposits, kept the funds safely in their
custody and thereafter aided Amaya to disappear from the country by
transferring the funds out of the country when their fraudulent conning
scheme was discovered having defrauded unsuspecting Kenyans of hundreds
of millions of shillings,” Mr Nyagudi claims.
NIC,
following a court order issued by Justice Rachael Ngetich, furnished
Lion’s Heart and Mr Nyagudi with a copy of documents used in opening of
the disputed bank accounts.
Mr Nyagudi holds that only
he and Mr Baazov are listed as directors of Amaya Gaming Group Kenya
hence only the two of them had authority to open bank accounts.
He
adds that the NIC nonetheless opened Amaya bank accounts despite being
aware that the other individuals granted access to the accounts did not
have the authority to do so.
NIC has asked the High
Court to bar Mr Nyagudi from using the documents he has attached as
evidence in the suit, as they are confidential and were issued before
permission from the lender’s legal department was sought.
NIC
has also sought to bar Mr Nyagudi and Lion’s Heart from instituting
contempt of court proceedings against its executives for failing to
provide more documents related to the disputed accounts.
“The
bank inadvertently forwarded copies of documents on October 24, 2017 to
Mr Nyagudi’s and Lion’s Heart’s advocates before it could seek advice
from its legal advisers, Wamae & Allen. The plaintiffs should be
ordered to return all the documents and be restrained from relying on
them without leave of the court,” NIC says in its application.
The
bank adds that it has a confidentiality agreement with Amaya which bars
it from sharing account information with third parties.
Mr Nyagudi however says Justice Ngetich’s orders put an end to the confidentiality NIC has claimed.
He
has expressed fear he might be held accountable for the Sh73 million
that Lion’s Heart was to receive, being Amaya’s only director still in
Kenya.
“NIC Bank’s actions have now placed me in a very
vulnerable positions since I am the duly registered director and
shareholder on whose immediate shoulders all problems related to Amaya
shall bear. NIC Bank therefore must be held to account for the loss of
Sh73 million due and owing to Lion’s Heart’s from the lottery conducted
by Amaya,” Mr Nyagudi adds.
NIC says that Mr Nyagudi, being an Amaya director, ought to have sought permission from the court before suing the gaming firm.
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