CONTACTS: +254 726879488 (Mobile)
+254770 455 116 (Office)
By Steve Umidha
The Kenya Rugby Union (KRU) is embroiled in a legal battle over a breach of an exclusive contract agreement it signed with sports marketing firm 270 Degrees – an agency it appointed to source for strategic equity investors.
In a cautionary letter dated April 19, 2022 to 270 Degrees Sports Marketing & Consultancy Ltd, by Benchmark Solutions acting on behalf of KRU, the firm is accused of attempted swindling of Sh 0.9Billion in kickback fees to ‘accelerate’ the transaction.
Benchmark Solutions Limited is the lead arranger or intermediary in the Sh2.127 Billion deal, an amount the Union is seeking to raise through issuance of new shares to investors to run its affairs.
“Your allegations that ‘in relation to this transaction, the personas are in debt of Kes. 900,000’ is malicious, deceitful, and dishonest and false, to cover up your request for bribes and extortion, noting that such amounts are not even commensurate to Administrative Costs incurred by Benchmark Solutions Limited in support of this transaction,” noted the statement, addressed to Ng’arua Kamuya, a director at 270 Degrees Sports marketing & consultancy ltd.
Further, Benchmark Solutions accuses 270 Degrees owners of colluding with rogue machinists to alter the legal binding contracts the two signed, in what it said could put in danger the deal expected to be concluded at the tail end of May 2022.
“In collusion with rogue operatives, you have recklessly distributed some components of valid and legal binding contracts to deceive, manipulate, mislead and misinform the public,” it noted.
The amount in question is part of the USD500M or Sh 58 Billion investment by a consortium of commercial banks and other investors to be used to support SMEs in several African countries in which KRU has been considered.
“As you are fully aware, this Sh 2.127 billion investment is part of a $500M Master Investment intended by The Consortium of Policy Banks, Commercial Banks and Non-Bank Financial Institutions in The International Community under Investment Memorandum Number 037/EOI/BIL/05/2021 aimed for 19 Impactful Projects across several African Countries, in which the Kenya Rugby Union LLC is under consideration,” the statement reads in part.
Benchmark Solutions, convinced of a serious breach it signed by 270 Degrees, has threatened to terminate or re-allocate the said investment and further warned that it may be compelled to institute civil and criminal proceedings against the Agency and its operatives should it fail to heed to the notice.
“This is tantamount to a serious breach, needless to say, gravely jeopardizing and inhibiting the success of this transaction,” the statement continued.
The money raised will be used to support the Safari Sevens, National 15s team test matches, National Sevens Circuit, Kenya Cup, Rugby Super Series, Barthes Cup and Merchandising. in addition to meeting the expenses of The National Teams, Kenya Shujaa, Kenya Simbas, Kenya Chipu and Kenya Lionesses.
The Rugby Union like most sports in the country is cash trapped and seeking the funds to cater for its operations – a situation that was compounded by the Coronavirus pandemic.
Indeed in 2020 Kenya Seven’s players’ contracts were terminated by KRU as a result of the pandemic – a sporting giant that was still bogged by the financial challenges occasioned by the withdrawal of sponsors and continued absence of key players.
The budget for the Kenya Sevens outfit in a year for instance, is estimated between Sh60 and 70 million including salaries, wages, training camps, supplements, gym fees and other miscellaneous expenses.
The Union however, recorded an increased income revenue of Sh 336 Million for the year ended December 2021 from Sh96Million it reported a year earlier, with the growth attributed to more State’s funding during the Covid-19 period and enhanced performance from World Rugby.