Government of Kenya has suffered a major setback after a three-judge bench Francis Gikonyo, Tabitha Ouya and Roseline Aburili declared the proposed sale of 15% of the Government of Kenya’s stake in Safaricom PLC unconstitutional, invalid and null and void.
The court found that the process through which the shares were to be sold violated the Constitution and several laws, particularly due to the lack of adequate public participation. The judges ordered that the 15% stake, if already transferred, be restored to the ownership of the Government of Kenya on behalf of the people.
The court also found that the transaction was presented to the Cabinet, Parliament and the public as a straightforward sale of shares, yet it contained elements of a merger, acquisition and takeover.
According to the judges, the process was marred by obscurities, misrepresentations and concealment of material information concerning the nature and effect of the transaction.
The bench further held that the arrangement would have resulted in effective control of Safaricom passing to a single foreign entity with a 55% shareholding, raising issues under the Capital Markets Act, the Capital Markets (Takeovers and Mergers) Regulations and the Competition Act.
The court also ruled that the divestiture violated constitutional principles of intergenerational and intragenerational equity and sustainable development under Articles 10 and 201 of the Constitution.
In another key finding, the judges declared that the procurement of transaction advisers, including KCB Investment Bank Limited, was undertaken in violation of Article 227 of the Constitution and the Public Procurement and Asset Disposal Act.
The court subsequently quashed Session Paper No. 3 of 2025, which had been approved by the National Assembly in relation to the Safaricom transaction. It also quashed any approvals, exemptions and no-objections issued by relevant authorities or other parties in connection with the disputed divestiture. The judges further quashed any merger, acquisition or takeover of Safaricom PLC arising from the transaction.
The bench said the petitioners had proved, on a balance of probabilities, that the divestiture had been undertaken and procured in breach of the Constitution and the law.
The ruling effectively nullifies the proposed 15% sale of the Government’s Safaricom stake and provides for restoration of the shares to the Government on behalf of Kenyans.Justice Francis Gikonyo declined to stay its judgment ordered respondents to file a formal application
