Kenya’s High Court has declared the government’s sale of a 15 per cent stake in Safaricom PLC to Vodacom Group unconstitutional, null and void, ordering the shares restored to the state.
A three-judge bench of the High Court’s Constitutional and Human Rights Division ruled on Monday that the process used to divest the government’s shareholding in East Africa’s most valuable listed company breached the Constitution and several statutes governing the disposal of public assets.
The court found that the process through which the shares were to be sold violated the Constitution and several laws, ultimately declaring the transaction “invalid, null and void.” The judges ordered that the 15 per cent stake, if already transferred, be restored to the Government of Kenya on behalf of the people.
The judgment caps six months of litigation that began in March, when petitioners Tony Gachoka and Prof Fredrick Ogola secured conservatory orders halting the transaction, before former Vice President Kalonzo Musyoka and other petitioners joined the case. The Court of Appeal lifted those orders in late June, clearing the way for the KES204.3 billion ($1.6 billion) deal to close on June 30. Vodacom’s shareholding in Safaricom rose to about 55 per cent, while the government’s stake fell to 20 per cent. Monday’s ruling now unwinds that outcome.
The court held that the divestiture was undertaken without adequate and meaningful public participation as required by the Constitution. The judges said citizens could not be expected to make informed contributions to the process when material details of the transaction had not been disclosed. Information about the identity of the buyer, the court found, was also not presented consistently.
The bench faulted how the deal was packaged for state organs, finding that the transaction was presented as a straightforward sale of shares even though documents before the court showed it involved elements of a merger, acquisition and takeover. The judges described the process as marred by obscurities, misrepresentations and concealment of material information.
The court found that the arrangement would have handed effective control of Safaricom to a single foreign entity holding 55 per cent, contrary to the Capital Markets Act, the Capital Markets (Takeovers and Mergers) Regulations and the Competition Act. It also held that the divestiture offended constitutional principles of intergenerational and intragenerational equity and sustainable development under Articles 10 and 201.
The judges further found that transaction advisers, including KCB Investment Bank Limited, had been procured in violation of Article 227 of the Constitution and the Public Procurement and Asset Disposal Act. The court quashed Session Paper No. 3 of 2025, which Parliament had approved in relation to the divestiture, along with all approvals, exemptions and no-objection decisions issued in connection with the deal. It also ordered the quashing of any merger, acquisition or takeover of Safaricom arising from the transaction.
Relying on Article 2 of the Constitution, which renders any act inconsistent with the Constitution invalid, the judges held that the petitioners had proved, on a balance of probabilities, that the divestiture was undertaken and procured in breach of the Constitution and the law. Each party was directed to bear its own costs, with the court noting the case was public-interest litigation.
The ruling throws into fresh uncertainty a transaction the Treasury had counted on to help fund infrastructure spending, and reopens questions over governance changes Safaricom’s shareholders had already ratified after the deal closed. Vodacom, which had moved to consolidate Safaricom onto its balance sheet following the June completion, now faces the prospect of unwinding one of the largest privatisation transactions in Kenya’s history.
Real ESG impact doesn’t happen in panels alone, it happens in the rooms where financiers, operators, and policymakers actually align. Our GreenShift Forum 2026 cuts the noise, bringing together the people rewiring Africa’s sustainability and energy frameworks for one focused day in Nairobi. Secure your seat.
Go to TECHTRENDSKE.co.ke for more tech and business news from the African continent and across the world.
Follow us on WhatsApp, Telegram, Twitter, and Facebook, or subscribe to our weekly newsletter to ensure you don’t miss out on any future updates. Send tips to info@techtrendsmedia.co.ke
