The National Treasury will challenge a High Court ruling that invalidated the sale of the Government’s 15 per cent holding in Safaricom Plc, Cabinet Secretary John Mbadi has announced.
Mbadi said Wednesday that the government had begun the process of appealing the decision, which found that the divestiture breached constitutional and statutory requirements.
Speaking to journalists in Kisumu, the Treasury CS said the government would take the matter to the Court of Appeal and defend the transaction through the appellate process. Mbadi maintained that Treasury was satisfied that the sale had been subjected to the necessary scrutiny and approvals, including consideration by Cabinet and the National Assembly.
He disputed the High Court’s finding that the government failed to conduct adequate public participation, saying the Safaricom divestiture had undergone extensive consultation before it was approved. Of the various transactions undertaken by Treasury, Mbadi said the Safaricom sale was among those where he believed the government had engaged the public extensively.
The CS declined to engage in a detailed discussion of the judgment, saying the government had already indicated its intention to appeal. He also said the decision demonstrated that Kenya’s judicial and legal systems were functioning, urging investors not to interpret the ruling as evidence of a breakdown in the country’s investment environment.
The High Court’s decision came from a three-judge bench that found significant shortcomings in the process used to dispose of the government’s Safaricom stake. The judges held that the public had not been given adequate participation in the transaction and also raised concerns about the disclosure of material information, including aspects relating to the proposed purchaser.
The court concluded that the petitioners had established, on a balance of probabilities, that the divestiture had been carried out contrary to the Constitution and applicable laws. As a result, the judges declared the transaction invalid and null and void and issued several orders cancelling decisions and approvals associated with the sale.
The government’s 15 per cent stake was sold to Vodacom for Sh204.3 billion, with the transaction completed in June 2026.
The judges also examined the implications of Vodacom’s existing interests in Safaricom and found that the transaction resulted in the South African company obtaining effective control of the telecommunications firm following its acquisition of full ownership of Vodafone Kenya.
The government had maintained that Parliament approved the transaction in March following public hearings and consideration of its economic, fiscal, legal and national security implications. However, the High Court found that the divestiture also raised constitutional concerns relating to intergenerational and intragenerational equity as well as sustainable development.
The judges further faulted the procurement of transaction advisers, including KCB Investment Bank Limited, finding that the process did not comply with Article 227 of the Constitution and the Public Procurement and Asset Disposal Act.
The court consequently annulled Session Paper Number Three of 2025, which had received parliamentary approval in connection with the proposed sale. It also cancelled any approvals, exemptions and no-objection decisions issued by public authorities or other parties in relation to the transaction.
In addition, the judges nullified any merger, acquisition or takeover of Safaricom arising from the disputed divestiture. The court ordered that the 15 per cent shareholding be returned to the Government of Kenya on behalf of the people.
The judges rejected arguments that reversing the transfer would be impossible, directing that the shares be restored notwithstanding the changes that had taken place following completion of the transaction.
Treasury’s planned appeal will now move the dispute to the Court of Appeal, where the government will challenge the High Court’s findings on the legality of the divestiture.
