By Spy Uganda
Kenya’s High Court has declared the government’s sale of a 15 per cent stake in Safaricom PLC to Vodacom Group unconstitutional, invalid and null and void, ordering that the shares be restored to the Government of Kenya on behalf of the public.
A three-judge bench of the High Court’s Constitutional and Human Rights Division ruled that the process used to dispose of the government’s stake breached constitutional and statutory requirements, including rules governing public participation and the disposal of public assets.
The decision effectively puts in question a transaction completed less than three months ago. On June 30, 2026, Vodacom acquired the 15 per cent government stake for KES204.3 billion (about UGX6.20 trillion), increasing its effective ownership of Safaricom to about 55 per cent while reducing the government’s stake to 20 per cent.
The court found that the transaction was undertaken without adequate and meaningful public participation. The judges said the public could not make informed contributions when key information about the transaction had not been sufficiently disclosed.
The bench also questioned the way the deal was presented to state institutions. According to the ruling, the transaction was presented as a straightforward sale of government shares, while documents before the court indicated that it had elements of a merger, acquisition and takeover.
The judges further found that material information about the transaction, including details concerning the buyer and its potential effect on control of Safaricom, had been concealed or misrepresented.
The court also held that the arrangement raised concerns under Kenya’s Capital Markets Act, the Capital Markets (Takeovers and Mergers) Regulations and the Competition Act because Vodacom’s resulting shareholding gave it majority control of Safaricom.
The judges further faulted the procurement of transaction advisers, including KCB Investment Bank, finding that the process did not comply with constitutional and public procurement requirements.
The ruling also quashed Sessional Paper No. 3 of 2025, which Parliament had approved in relation to the divestiture, together with approvals, exemptions and no-objection decisions connected to the transaction. The court also ordered the quashing of any merger, acquisition or takeover of Safaricom arising from the disputed transaction.
The legal battle began earlier this year after petitioners, including journalist and activist Tony Gachoka and Prof Fredrick Ogola, challenged the proposed sale. The High Court initially issued orders blocking the transaction, but the Court of Appeal lifted the restrictions in June, allowing the deal to proceed on June 30.
The High Court’s latest decision now opens another phase of the dispute. Kenya’s National Treasury has already announced that it will appeal the judgment, while Vodacom has also indicated that it will challenge the decision and seek a stay pending the appeal.
The government had received KES204.3 billion (about UGX6.20 trillion) from the sale of the 15 per cent stake. It also received about KES40.7 billion (about UGX1.24 trillion) through an arrangement involving future dividend rights on its remaining Safaricom shares.
For now, Safaricom continues operating normally, but the ownership structure created by the June transaction is subject to the ongoing legal process. The outcome of the appeal will determine whether Vodacom’s majority position remains in place or whether the government’s 15 per cent stake must ultimately be restored.
The case has also placed renewed attention on how Kenya disposes of strategic public assets, particularly the constitutional requirements for transparency, public participation and accountability.
The key point to watch next is the appeal and any application for a stay, because the High Court ruling does not necessarily mean the ownership structure will immediately be reversed while the case moves through the appellate courts.
