The Comedy store proprietor, Alex Muhangi, is accused of spying on fellow comedians who don't support NRM regime.
It is alleged he snitched on one of the members of the Mighty family, Sam Ekanya and led to his arrest.
Muhangi came out to deny the allegations claiming his competitors are championing the rumours to frame him among the rightful thinking members of public.
During a radio interview, he said he is in talks with his legal team to see the way forward.