Kalonzo hails High Court ruling nullifying Safaricom stake sale

Wiper Party Leader Kalonzo Musyoka. [File, Standard]

Wiper Party leader Kalonzo Musyoka has hailed  High Court’s decision nullifying the government’s sale of a 15 per cent stake in Safaricom Plc to South Africa’s Vodacom.

Kalonzo, who was lead counsel for the petitioners in the case, said the ruling vindicated the legal challenge against the transaction, describing the judgment as a victory for Kenyans.

“The people have won. Safaricom is coming home,” Kalonzo said in a statement issued on Wednesday, September 16.

On Tuesday, a three-judge bench of the High Court declared the sale unconstitutional and illegal and ordered the 15 per cent stake to be restored to State ownership.

The court found that the transaction, involving the government’s Sh204.3 billion stake in Safaricom, violated provisions of the Constitution and laws governing public finance, procurement, capital markets and competition.

The judges also found that the government had entered into agreements for the sale of the shares before completing the required policy and parliamentary approval processes.

The court further faulted the government for failing to conduct meaningful public participation and for misrepresenting or concealing material information relating to the transaction.

It also found that the proceeds from the sale were not tied to specific projects, despite the government’s intention to channel the funds into the National Infrastructure Fund.

Kalonzo said the judgment affirmed Safaricom’s status as a strategic national asset, citing its role in Kenya’s telecommunications, financial and electoral infrastructure.

According to him, the transaction was conducted without adequate safeguards, accusing the government of failing to disclose key details of the deal to the public.

Kalonzo also questioned the valuation of the shares, noting that the government sold 6.01 billion Safaricom shares at Sh34 each, generating Sh204.3 billion from the 15 per cent stake.

He alleged that the government had also received Sh40.2 billion as an advance against future dividends from its remaining 20 per cent stake.

The court, however, did not determine a new value for the shares. Its decision focused on the legality and constitutionality of the process through which the transaction was undertaken.

Kalonzo further criticised the government for proceeding with the sale after conservatory orders had previously halted the transaction, arguing that the lifting of those orders by the Court of Appeal did not amount to a declaration that the sale was lawful.

The government, however, has said it will challenge the High Court decision. On Wednesday, Treasury Cabinet Secretary John Mbadi confirmed that the State would appeal the ruling.