Court quashes planned sale of 15pc govt stake in Safaricom

NAIROBI, Kenya Sep 15 – A three-judge bench of the High Court has quashed the decision to sell the government’s 15 percent stake in Safaricom PLC to Vodafone, declaring the planned transaction unlawful.

The bench comprising Justices Francis Gikonyo, Roselyne Aburili and Fridah Awiyo found that the government failed to comply with constitutional and legal requirements in the proposed disposal of the shares.

In separate judgments, the judges held that the process violated the Constitution, including Article 10(1)(c), which requires public participation in the exercise of public authority and decision-making.

The court faulted both the Cabinet and the National Assembly for failing to observe various constitutional and regulatory requirements before proceeding with the proposed sale.

The judges also pointed to the failure to obtain or adequately consider relevant advisory input, including from the Capital Markets Authority and national security agencies, given Safaricom’s strategic importance to the Kenyan economy and millions of customers.

The court further raised concerns over the non-disclosure of material information relating to the proposed divestiture, including the identity of the intended purchaser or beneficiary.

The judges observed that the lack of transparency surrounding the transaction raised questions over whether the proposed arrangement could ultimately result in the takeover of Safaricom by undisclosed individuals or entities.

The ruling followed a petition filed by Tony Gachoka and Paul Maina, who challenged the government’s decision to dispose of the 15 percent stake.

The petitioners, represented by Dr Stephen Kalonzo Musyoka and Vincent Lempaa, argued that the proposed sale was unlawful and had been undertaken without adequate public participation and transparency.

The High Court subsequently declared that the government’s 15 percent shareholding in Safaricom should remain intact.

The judges also criticised the National Assembly for proceeding with a motion relating to the sale despite a conservatory order issued by High Court Judge Lawrence Mugambi halting the disposal of the government shares.

The decision effectively blocks the proposed transaction and reinforces the requirement for the government to comply with constitutional safeguards when disposing of public assets.

The ruling comes amid continued scrutiny of government decisions involving strategic state assets and the requirement for transparency, public participation and accountability in their disposal.