The Kenyan government will appeal a High Court ruling that nullified the sale of a 15 per cent stake in Safaricom Plc to South Africa’s Vodacom Group.
The High Court ruled that the shares transferred as part of the partial divestiture were transferred in contravention of the Constitution and the law and ordered that they be returned to government ownership.
In its ruling, the court stated:
“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 of Kenya.”
The ruling effectively seeks to reverse the transfer of the 15 per cent stake, which had been sold to Vodacom as part of the government’s divestiture of its holding in Kenya’s largest telecommunications company.
Treasury Cabinet Secretary John Mbadi has indicated that the government will challenge the decision at the Court of Appeal.
Vodacom has also said it intends to appeal the judgment and seek a stay of the High Court’s orders while the legal challenge proceeds.
The dispute follows the government’s transfer of approximately 6.01 billion Safaricom shares, representing 15 per cent of the company, to Vodacom at KSh34 per share. The transaction was valued at approximately KSh204.3 billion.
The High Court’s decision centred on constitutional and legal requirements surrounding the transaction, including questions relating to public participation and disclosure of information.
The appeal will now determine whether the transaction will ultimately stand or whether the shares will have to be restored to government ownership.
For investors, the case is significant because of its potential implications for Safaricom’s ownership structure, government asset divestiture and Kenya’s broader privatisation programme.
Related: Kenya High Court Nullifies KSh204.3 Billion Safaricom Stake Sale to Vodacom
