Mozzartbet Kenya manager Sasa Krneta at a past event in Nairobi/ Mozzartbet.
NAIROBI, Kenya Apr 14- The High Court of Kenya has ordered betting firm MozzartBet to surrender over Sh300 million to the Assets Recovery Agency after the judge ruled that the funds were proceeds of crime.
Court filings show that the funds frozen two years ago include Sh251 million in an account at Diamond Trust Bank, Sh50 million at Co-operative Bank, and Sh2.4 million at NBCA Bank.
In her ruling, Justice Esther Maina found that the money held in three bank accounts was part of a money-laundering scheme and should be forfeited to the government.
According to court filings by the ARA, MozzartBet used its paybill number 290059 to send the money to Kimaco Connections to its paybill 311372.
The highest amount sent was Sh50 million in a single day while the lowest was Sh1.8 million.
ARA said that the betting firm sent a total of Sh256 million in a span of five days, flagging the funds as suspicious. The monies were then transferred to an account at Co-operative Bank.
Mozzartbet defended the millions saying it had contracted another firm to supply an IT software for use in the betting business.
“The applicant (Assets Recovery Agency) has adduced evidence that proves that the 1st respondent (Kimaco Connections ltd) was a shell company incapable of even paying rent for the premises it occupied,” the Judge said.
Justice Maina questioned Mozzartbet’s decision to pay a third party to procure the IT software from a sister company unless the intention was to launder money.
MozzartBet had claimed that it paid the millions to acquire software from Kimaco Connections. Kimaco on the other hand says it subcontracted another firm- Open Skies Connections- to deliver the IT software.
The State however noted that Kimaco Connections owner Peter Kiilu did not provide the agreement or contracts he alluded to in his statement between Mozzartbet Kenya ltd and Open Skies Management Services.
The betting firm said the money was contributions from their shareholders and that it entered into a contract with Kimaco for the supply of IT software. The software was not supplied after the funds were frozen.
In the judgment, Justice Maina added that it was instructive that some of the funds also ended up in the pockets of some directors of Mozzartbet including former MP Musa Sirma.
“Clearly, the fact that the 1st respondent filed nil return to the Kenya Revenue Authority during the period is issued as sufficient proof that it was not engaged in any business,” the Judge said.
She added that a letter from the DCI allegedly clearing the firm was a decoy.
Further investigations by the ARA showed that Kiilu moved Sh150 million to a fixed deposit account and left a running balance of Sh101 million.
The company had between February and June, received Sh384 million from the betting firm and the amount was banked at Co-operative Bank, with Sh50 million put in a fixed deposit account and a running balance of Sh269.7 million.
The agency revealed in the court documents that the monies were later distributed to various companies associated with directors and shareholders of the betting firm.
The shareholders of MozzartBet Kenya as per CR12 attached to the court documents are Sirma with zero shares, Mid Logistics ltd with 300 shares, and MozzartBet Africa, registered in Mauritius holding 700 shares.
The agency flagged the transactions saying there are reasonable grounds to believe that the bank accounts and M-Pesa paybills were used as conduits of money laundering.
The agency said the use of mobile money transfer services to transfer funds from MozzartBet Kenya Ltd and Kimaco Connections Ltd was adopted to circumvent or evade the reporting threshold and Central Bank of Kenya prudential guidelines for account holders to declare the source of funds.