Kenya’s High Court has nullified the government’s sale of a 15 per cent stake in Safaricom PLC to South Africa’s Vodacom Group, ordering that the shares be restored to government ownership.
A three-judge bench ruled on Tuesday, September 15, 2026, that the transaction was conducted in violation of the Constitution and various laws, citing inadequate public participation, lack of transparency and the concealment or misrepresentation of material information about the deal.
The government sold the 15 per cent stake for KSh204.3 billion, at KSh34 per share. The transaction involved approximately 6 billion Safaricom shares and was completed in June 2026 after the Court of Appeal lifted orders that had temporarily blocked the deal.
Court orders shares returned to State
In its ruling, the court ordered the 15 per cent stake to be restored to the Government of Kenya on behalf of the people.
“A declaration is hereby made that the 15 per cent shares subject of the partial divestiture having been transferred in contravention of the Constitution and the law are hereby restored to the ownership of the Government of Kenya on behalf of the people.”
The judges also quashed decisions and approvals associated with the divestiture.
The court found that the government had failed to provide adequate information about the transaction to the public, Cabinet and Parliament. It particularly faulted the process surrounding the identity of the purchaser and the implications of the transaction.
Court says transaction amounted to takeover
The judges further held that the transaction had been presented as a partial sale of government shares but effectively resulted in Vodacom gaining majority control of Safaricom.
Vodacom’s effective ownership increased after it acquired full ownership of Vodafone Kenya, the investment vehicle through which it held part of its Safaricom interest. The court said the resulting structure gave Vodacom effective control of the listed telecommunications company.
The court consequently characterized the transaction as involving a merger, acquisition and takeover and found that relevant requirements under Kenya’s capital markets and competition laws had not been adequately addressed.
Public participation questioned
A central issue in the case was whether Kenyans had been given a meaningful opportunity to participate in the decision to dispose of the State’s stake.
Although Parliament held public hearings in several counties, the court found that key transaction documents, including the share purchase agreement and dividend rights agreement, had not been made available to the public.
The judges said public participation must be meaningful rather than merely procedural.
The court also raised concerns about Safaricom’s strategic importance, citing infrastructure and services including mobile money, government payment platforms and election-related systems. It said national-security considerations required attention before effective control of such infrastructure was transferred to a foreign entity.
Government to appeal
The ruling is unlikely to be the final chapter in the dispute.
Treasury Cabinet Secretary John Mbadi said Wednesday that the government would appeal the High Court decision. The government has maintained that the transaction followed the law and had received parliamentary approval.
Vodacom has also announced plans to challenge the ruling at the Court of Appeal and seek an order suspending implementation of the judgment while the appeal is considered.
Safaricom, meanwhile, said it was reviewing the judgment and its implications as the legal process continues.
Deal included future dividend rights
The KSh204.3 billion share purchase was only one component of the broader transaction.
Vodacom also paid the government KSh40.2 billion upfront for rights linked to future dividends from the State’s remaining 20 per cent Safaricom holding. The combined proceeds were therefore reported at approximately KSh244.5 billion.
The High Court also questioned the decision to monetize future dividend income, arguing that converting a continuing public revenue stream into a one-off payment raised issues of intergenerational equity.
The court’s decision now sets the stage for a further legal battle over one of Kenya’s largest recent state-asset transactions, with the final outcome dependent on the appeal process.
