Kenya High Court nullifies Safaricom stake sale to Vodacom

The High Court of Kenya has nullified the government’s Kshs 204.3 billion sale of a 15% stake in Safaricom PLC to Vodacom Group, declaring the transaction invalid and void. The ruling orders that the shareholding be restored to the government on behalf of the public.

A three-judge bench cited four primary reasons for the decision. First, the court found a lack of transparency, noting that the deal was presented as a partial divestiture but effectively functioned as a takeover that granted control to a foreign entity without disclosing key documents to Parliament or the public. Second, the court ruled that public participation was insufficient, stating that hearings did not compensate for the absence of underlying transaction documents.

Third, the judges raised national security concerns, noting that Safaricom manages critical infrastructure, including mobile money services and election transmission systems, which requires a prior national security assessment before transferring effective control. Finally, the court rejected the valuation of the sale, describing the pricing as arbitrary and ruling that the sale of future dividend rights disadvantaged future generations' claims on a public asset.