Vodacom said it will appeal a Kenyan High Court decision invalidating the government\u2019s sale of a stake in East Africa\u2019s biggest mobile-network operator to the South African-based wireless carrier.<\/p>\n\n\n\n
The court ordered that the 15% stake in Safaricom be returned to the government.<\/p>\n\n\n\n
It ruled that the sale violated public-finance management laws and failed to fully comply with public-participation requirements.<\/p>\n\n\n\n
Judges Francis Gikonyo, Roselyne Aburili and Tabitha Ouya handed down the decision on Tuesday (15 September) in Nairobi.<\/p>\n\n\n\n
\u201cAs interim steps, Vodacom will lodge an appeal against today\u2019s decision with the Court of Appeal and will also apply for a stay pending the determination of the appeal,\u201d the company said in response to questions sent by text message.<\/p>\n\n\n\n
Vodacom shares fell nearly 4%, the most since July 27, in Johannesburg trading after the ruling before retracing losses. Safaricom shares jumped as much as 2.2% during Kenya\u2019s trading session.<\/p>\n\n\n\n
The divestiture was undertaken in contravention of the constitution and the law and was therefore \u201cinvalid, null and void,\u201d the judges said. <\/p>\n\n\n\n
\u201cThe 15% shares are hereby restored to the government of Kenya.\u201d<\/p>\n\n\n\n
If the appeal is unsuccessful, Kenya\u2019s cash-strapped state may need to refund about $1.9 billion (R31 billion) it\u2019s already received for the stake.<\/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, while 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 agreed to buy an additional stake in Safaricom from the Kenyan government in December, increasing its shareholding to about 55% from almost 40%. 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
Vodacom said the transaction was completed on June 30 following the lifting of the conservatory order by the Court of Appeal and the fulfilment of all relevant conditions precedent.<\/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
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":"
Vodacom plans to appeal a recent Kenyan High Court decision on the company’s sale of a stake in Safaricom.<\/p>\n","protected":false},"author":59,"featured_media":856161,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2100121519489782194","_sma_facebook_post_id":"191437357620492_2206984350121964","_sma_instagram_post_id":"17969187765178001","_sma_x_attempts":1,"footnotes":""},"categories":[21],"tags":[2412,5246,27],"class_list":["post-875717","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-telecommunications","tag-kenya","tag-safaricom","tag-vodacom"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/875717","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=875717"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/875717\/revisions"}],"predecessor-version":[{"id":875725,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/875717\/revisions\/875725"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/856161"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=875717"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=875717"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=875717"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}