The Kenyan High Court has officially frozen the state’s planned multi-billion shilling sale of a 15% stake in telecom giant Safaricom to South Africa’s Vodacom Group, citing serious data privacy and constitutional concerns.
A Sh231 Billion Transaction on Ice
A three-judge bench issued a conservatory order stopping the National Treasury from moving forward with the massive deal, which involves offloading six billion government-owned Safaricom shares.
Under the initial framework signed late last year, Vodacom was set to pay billions upfront to gain absolute majority control of Kenya’s largest company by market cap.
If the transaction eventually goes through, the Kenyan government’s direct ownership in Safaricom will plummet from 35% down to just 20%. The state had previously earmarked the total proceeds from this sale to finance President William Ruto’s newly launched National Infrastructure Fund to build roads and water projects.
“A conservatory order is hereby issued restraining the respondents from proceeding with the intended sale of Safaricom shares pending further legal determination,” the High Court bench ruled.
Why the Deal Was Blocked
The legal halt comes after three private Kenyan citizens filed public-interest petitions challenging the transaction on two major fronts:
- Severe Undervaluing: The petitioners argue that the agreed sale price of R5.54 per share is far too low. Independent financial experts estimate Safaricom’s intrinsic value at closer to R10 per share, meaning the current deal would cause a massive loss of public wealth.
- Lack of Public Participation: The court agreed that the National Treasury completely bypassed meaningful public participation, which directly violates the Constitution of Kenya when selling key national assets.
South Africa’s Vodacom Group confirmed it has noted the court’s decision and intends to respect the ongoing judicial process.
Despite the temporary setback, Vodacom stated that its long-term strategic partnership with Safaricom remains intact as East Africa continues to be its primary growth driver for digital financial services.
Frequently Asked Questions (FAQs)
1. Who currently owns Safaricom PLC?
Safaricom is a publicly traded company on the Nairobi Securities Exchange (NSE). Before this blocked transaction, the shareholding structure was split into three primary blocks: the Government of Kenya owns 35%, South Africa’s Vodacom Group holds 35%, Britain’s Vodafone maintains 5%, and the remaining 25% belongs to public retail investors and institutional funds.
2. Why is the Government trying to sell its Safaricom shares?
The National Treasury is facing tight fiscal constraints and a heavy sovereign debt repayment schedule. Selling a 15% stake in Safaricom was planned as an emergency resource mobilization strategy to generate cash quickly for the state’s infrastructure developments without borrowing more from international lenders.
3. How does this High Court freeze affect regular M-Pesa and Safaricom users?
Regular users will experience absolutely no disruption to their daily calls, data services, or mobile money transactions. This legal battle is strictly a shareholder-level corporate dispute regarding ownership equity and asset pricing; daily telecom operations remain completely unaffected.
4. What is the main data privacy issue raised in the petition?
The petitioners raised concerns that handing absolute majority voting control to a foreign-based entity like Vodacom Group could compromise national data sovereignty. Because Safaricom stores the financial and communication logs of over 40 million Kenyans, the petition argues that a change in majority control requires strict regulatory vetting under the Office of the Data Protection Commissioner (ODPC).
5. What happens next in the Safaricom court case?
The conservatory freeze remains active until the three-judge High Court bench hears the full constitutional arguments from both the Attorney General and the petitioners.
The National Treasury is expected to file an urgent appeal to overturn the block, meaning a definitive ruling on whether the sale can proceed will likely take several months.
The timing of this ruling coincides with an aggressive push by tech regulators to tighten operational guardrails for mobile service providers across Kenya.
Beyond individual privacy cases, the Communications Authority of Kenya (CA) is actively reviewing compliance measures around how user data is stored, handled, and shared with third-party service providers.
Safaricom has not yet publicly confirmed whether it will appeal the multi-million shilling judgment, but tech analysts note the decision will likely force all local network operators to overhaul their internal access logs and security protocols immediately.
READ ALSO: Ruto Promises Diesel Price Cut After Transport Strike
