How Safaricom sale ruling exposes parliament’s blind spot in state-asset deals

Nairobi, Kenya - A three-judge bench of Kenya's High Court has overturned plans to sell the government's 15 percent stake in mobile giant Safaricom PLC to Vodafone, deeming the proposed transaction unlawful. The court, consisting of Justices Francis Gikonyo, Roselyne Aburili, and Fridah Awiyo, ruled that the government had not adhered to constitutional and legal requirements in the planned share disposal.

The judges found that the process contravened Kenya's Constitution, particularly Article 10(1)(c), which mandates public involvement in public decision-making. They criticized both the Cabinet and the National Assembly for not following relevant constitutional and regulatory procedures before moving forward with the sale. Moreover, the court criticized the lack of transparency, highlighting the failure to disclose crucial information such as the identity of the intended purchaser and the insufficient consideration of expert input, including from the Capital Markets Authority and national security agencies.

Given the critical role Safaricom plays in Kenya's economy and customer base, the court raised concerns over potential takeover by undisclosed parties. The ruling follows a petition by Tony Gachoka and Paul Maina, who challenged the government's decision. The High Court declared that the government's 15 percent share in Safaricom should remain with the state.

The decision also reprimanded the National Assembly for moving ahead with the sale despite a restraining order halting the disposal issued by High Court Judge Lawrence Mugambi. This ruling effectively halts the proposed transaction and underscores the necessity for adherence to constitutional safeguards when disposing of public assets, emphasizing the need for transparency and accountability in such matters.