The controversy over the rushed payments for the government acquisition of Telkom Kenya has deepened after it emerged that Jamhuri Holdings is still the majority shareholder even after it was paid Sh6.091 Billion last year.
Solicitor General Ken Ogeto on Tuesday told a joint parliamentary committee that the shareholding of Telkom Kenya was still in the hands of two companies registered in the Cayman Island and Mauritius seven months after the government purchased the shares.
National Assembly Joint Sitting of the Finance and National Planning, and Committee on Communication, Information & Innovation chaired by Molo MP Kimani Kuria is conducting an inquiry into the Buyback and Legal Status of Telkom Kenya Ltd following its acquisition by the government on August 2.
The Treasury withdrew Sh6.09 billion on August 5, 2022, and paid Jamhuri Holdings Ltd, a Mauritius-based subsidiary of Helios in a transaction that lacked parliamentary approval.
100 per cent acquisition
While appearing before the committees, Ogeto said despite the fact that the firm was paid for the 100 per cent acquisition of the company, the government still held 37.9 per cent of the shares while Jamhuri Holdings has 56 per cent.
“The government does not have the 100 per cent shareholding as per the current arrangement. The government has 37.9 per cent and 56 per cent for Jamhuri Holdings,” said Ogeto.
He also said he did not know the owners of the Jamhuri Holdings company and that the government would rely on the Mauritius government to unveil their identities.
“For the owners of the companies in Cayman Island, it will be hard to know the owners,” said Ogeto.
Kuria wondered why companies with dubious ownership and registrations from known destinations of fraudulent financial practices were allowed to transact with the government.
“Does any of the two companies have local offices? Who are their local representatives, when the money was paid which account did it go to,” asked Kuria.
Kuria gave the Solicitor General two days to present to the committees his opinion on transaction.
Ogeto had been invited to explain the ownership of Helios Investment Partners and Jamhuri Holdings Limited.
On the Helios Investment Partners (Kenya) Limited CPR/2011/52674, Ogeto said the firm was registered on July 27, 2011.
At incorporation, Ogeto said, the shareholders and directors of the company included HIP GPI Limited and HIP GP II Limited both companies registered and with addresses in the Cayman Islands.
Some of the other directors included Irish men Paul Gerard and Henry Awele Obi and Kenyan Robert Mwangi.
“On 4th July 2013, the company filed a Form 203A notifying the Registrar that Robert Mwangi Ndung’u had resigned as the company’s secretary and Mutual Registrars had been appointed in his place. Shantilal Shah Khimji appeared to be the person acting on behalf of the firm of Mutual Registrars as per the filed form,” said Ogeto.
About Jamhuri Holdings Limited (HL), Ogeto explained: “We note that the above company appears as a shareholder of Telkom Kenya Limited.
“However, the same is not registered in Kenya as per the records held by the Registrar of Companies. The address of the company is, however, captured as Level 3, Alexander House 35 Cybercity, Ebene, Mauritius.”
Telkom Kenya CEO Mugo Kibati, when he appeared before the MPs said the company was not involved in the transaction as that was a deal between shareholders.
In June 2016, Helios acquired 60 per cent of Telkom Kenya, following receipt of regulatory approval. In their website they indicate they exited the company in September, 2022.
On Tuesday, Controller of Budget Margaret Nyakang’o told MPs that she refused to authorise the withdrawal of the billions to complete the deal.
However, she noted, the Treasury overruled her.
“If this agreement was duly executed, the law does not give me powers to question the legality of the documents, they insisted that the payment needed to be finalised because it had a deadline,” said Dr Nyakang’o.
Baringo North MP Joseph Makilap said asked what her role was if every requisition by the government were approved by her office.
“The framers of the constitution were clear in their mind when they created the office with independence and security of tenure. The role was to safeguard the Kenyan money. But your office seems to give approvals for anything even if it is illegal,” wondered Makilap.
Mid last month, National Assembly Majority Leader Kimani Ichung’wah claimed that part of the Sh6.09 billion paid by the government to acquire stakes in Telkom Kenya was shared among powerful individuals.
Ichung’wah alleged that the money was wired to offshore accounts two days after the August 9 General Election and that the legal ownership of the company still remains unclear.
“The money was wired to accounts in Malaysia, then back to individual accounts in Kenya then again to Cayman islands,” Ichung’wah said on Tuesday during a parliamentary session.