Kenya\u2019s High Court invalidated the government\u2019s sale of a stake in East Africa\u2019s biggest mobile-network operator to Vodacom Group, saying it was unconstitutional.<\/p>\n\n\n\n
The court ordered the 15% stake in Safaricom to be returned to the government, which may mean Kenya\u2019s cash-strapped state would have to refund about $1.9 billion (~R31 billion) it\u2019s already received for it.<\/p>\n\n\n\n
The $2.1 billion (~R35 billion) transaction was first announced in December 2025.<\/p>\n\n\n\n
The sale violated public finance management laws and didn\u2019t fully comply with a requirement for public participation, judges Francis Gikonyo, Roselyne Aburili and Tabitha Ouya said in a ruling handed down in the capital, Nairobi, on Tuesday (15 September).<\/p>\n\n\n\n
\u201cThe divestiture in question was undertaken and procured in contravention of the constitution and the law. It was therefore invalid, null, and void,\u201d they said. <\/p>\n\n\n\n
\u201cThe 15% shares are hereby restored to the government of Kenya\u201d<\/p>\n\n\n\n
Vodacom shares fell nearly 4% in Johannesburg trading after the ruling, the most since July 27, before retracing losses. Safaricom shares jumped as much as 2.2% during Kenya\u2019s trading session.<\/p>\n\n\n\n
Critical transactional documents such as the share-purchase agreement and a dividend rights purchase pact weren\u2019t disclosed for public scrutiny. <\/p>\n\n\n\n
In addition, the state didn\u2019t explain in court why it settled on Vodacom as a buyer without a competitive selection process, the judges said.<\/p>\n\n\n\n
In addition, the upfront monetisation of future dividends violated the constitution by disenfranchising citizens, and the transfer of control of a strategic asset to a foreign shareholder threatened national security, they ruled.<\/p>\n\n\n\n
\u201cThe divestiture involved the acquisition of effective control,\u201d the ruling states. \u201cIt was a takeover. This detail of information was not disclosed to the public.\u201d<\/p>\n\n\n\n
Vodacom, South Africa\u2019s largest wireless carrier, agreed to buy an additional stake in Safaricom from the Kenyan government in December, increasing its shareholding to about 55% from almost 40%. <\/p>\n\n\n\n
The Kenyan Treasury\u2019s interest was reduced to 20%.<\/p>\n\n\n\n
The court said the parties didn\u2019t apply for exemption from takeover requirements, and there was no evidence that the Competition Authority approved the transaction. <\/p>\n\n\n\n
Transaction advisory services were also procured from KCB Investment Bank Ltd. in contravention of the nation\u2019s laws.<\/p>\n\n\n\n
The sale raised about 204.3 billion shillings ($1.6 billion), along with an additional 40.2 billion shillings from the securitisation of future dividends.<\/p>\n\n\n\n
Kenyan President William Ruto\u2019s administration is privatising state assets to raise project financing needed to fire up the $141 billion economy. <\/p>\n\n\n\n
His administration has a $39 billion infrastructure pipeline that includes railways, airport upgrades, roads, power lines, dams and irrigation projects that he says will create jobs and cut transport and energy costs.<\/p>\n\n\n\n
The build-out will be partly funded by cash raised from the sale of assets, including Kenya Pipeline Co., and co-investment from the private sector, according to Ruto.<\/p>\n","protected":false},"excerpt":{"rendered":"
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