(NAIROBI, KENYA) – The High Court has quashed the Government’s sale of its 15% stake in Safaricom to Vodacom Group after finding that material information regarding the transaction was concealed from the public.
A three judge bench held that the deal, which was completed on 30th June, 2026, had been presented as a partial divestiture when in reality it amounted to a takeover that gave Vodacom effective control of Safaricom.
The court declared the divestiture invalid, null and void, quashed all approvals relating to the transaction and ordered that the 15% stake be restored to the Government of Kenya on behalf of the people.
“A declaration is hereby made that the partial divestiture of the 15% of the Government of Kenya shares in Safaricom PLC was a camouflage merger or acquisition and takeover of Safaricom PLC and is in contravention of the Constitution and the law,” said the court.
The government says it will appeal against the decision, but its attempts to convince the court to suspend the judgment pending the appeal were rejected. The court directed the parties, including the Attorney General, Safaricom and Vodacom, to file a substantive application seeking a stay of the judgment.
The court noted that under the arrangement, the South African multinational’s ownership in the Kenyan telco rose to 55% from 39.9% after taking full ownership of the investment vehicle Vodafone Kenya, through which it holds the shares in the Nairobi Securities Exchange listed firm.
The judges found that this critical information was not adequately disclosed to the public, the Cabinet or Parliament.
“A declaration is hereby made that the partial divestiture of the 15% of the Government of Kenya shares in Safaricom PLC was marred by obscurities on the proposed buyer, misrepresentations and concealment of material information on the nature and effects of the partial divestiture in violation of the principles of integrity and transparency,” said the court.
The court also raised concerns about national security, noting that Safaricom operates critical infrastructure, including election transmission systems, government payment platforms and mobile money services, and stores the personal data of millions of Kenyans.
“In the circumstances, even with regulatory safeguards, there is no guarantee that would prevent foreign and external influence or interference with the governance systems, personal security and data,” the court said.
The judges added that any perception of external influence over election transmission systems could undermine public confidence in the democratic process. They held that transferring effective control of such infrastructure to a foreign entity without a prior national security assessment violated the Government’s constitutional obligations.
The Government had sold the stake for KES 204.3 billion ($1.58 billion / GBP 1.25 billion / EUR 1.46 billion) at KES 34 per share and also received KES 40.2 billion ($311 million / GBP 246 million / EUR 287 million) through the sale of future dividend rights attached to its remaining 20% shareholding.
The transaction was approved in March, but it was delayed by a court order, which was lifted in June by the Court of Appeal after it ruled that the deal could be reversed if it was proved that there were anomalies.
The court faulted the Government for failing to competitively identify a strategic investor and found that the pricing process was arbitrary.
While the Government argued that the KES 34 share price was based on an independent valuation conducted by KCB Investment Bank and reflected a market premium, the judges held that the transaction failed the rationality test.
They also rejected the argument that selling future dividend income was a legitimate way of financing infrastructure projects, finding that converting a perpetual income stream into a one-off payment deprived future generations of the benefits of a public asset.
The court also found that although Parliament conducted hearings in 30 counties, crucial transaction documents, including the share purchase agreement and dividend rights agreement, were never made available to the public.
“We are thus in consonance with the petitioners that material information and documents were concealed from the public, Cabinet and the National Assembly,” the judges said.
The court held that public participation must be more than a procedural exercise but must be “real, purposive and meaningful.” The bench found that the process was undermined by non disclosure of material information, rendering Parliament’s approval constitutionally defective.
“In light of our findings above, we hold that there was no reasonable, meaningful and purposive public participation in respect of the divestiture, thus violating Articles 10 and 118 of the Constitution,” the judges said.
The judges further rejected arguments that the matter had been overtaken by events after Parliament approved the transaction in March, holding that the petitions challenged the constitutional foundation of the deal itself.
They also dismissed claims that existing regulators, including the Communications Authority and the Office of the Data Protection Commissioner, provided sufficient safeguards, saying regulatory oversight could not replace proactive measures to address national security risks before control of a strategic asset was relinquished.