Safaricom ruling crucial

The disposal of public assets, for whatever reason, must be done by strictly following the set regulations to ensure transparency, accountability, and realise the real value. The High Court’s nullification of the sale of the government’s shares in the giant telco, Safaricom, is food for thought. The reversal of the government’s sale of its 15 per cent stake in the firm underscores the need for the prudent management of public resources.

This Sh204.3 billion sale to Vodacom Group was declared unconstitutional for violating legal and procedural frameworks. One was the failure of the Cabinet and the National Assembly to facilitate meaningful public participation. It is a constitutional requirement to ensure decisions are not fast-tracked before citizens air their views.

The transaction was faulted over the “concealment of material information”, including the identity of the buyer and misrepresenting the terms. The deal was also marred by arbitrary pricing and failure to address security concerns over the transfer of control of the key telecommunications firm to foreigners.

Petitioners also argued that Safaricom was worth at least Sh70 per share and the government risked losing Sh250 million by selling each at Sh34.

While the government argued that the money would enable the new National Infrastructure Fund to build roads and airports, the court cited a lack of ring-fenced projects with transparent costs and timelines. The government was also found to have bypassed regulatory scrutiny under the Capital Markets and Competition Acts. The court ordered the 6 billion shares restored to government ownership. The ruling is a stern reminder that the protection of taxpayers’ interests is vital.

Safaricom operates critical infrastructure, including systems supporting elections, government payment programmes, mobile money, and the personal data of millions of Kenyans. By declaring the divestiture invalid, null and void and quashing the parliamentary approval, the judges have reaffirmed that national interest is paramount.

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