The government’s controversial buyback of Telkom Kenya from Helios Investors LLP/Jamhuri Holding Limited (JHL) at Sh6.1 billion in 2022, executed without parliamentary approval, has resurfaced, with MPs now demanding a special audit of the transaction.
At a meeting with National Treasury Principal Secretary Dr Chris Kiptoo, members of the Public Accounts Committee (PAC) expressed frustration over the slow pace of investigations by State agencies.
Committee members Dr Wilberforce Oundo (Funyula), Naisula Lesuuda (Samburu West) and Joseph Emathe (Turkana Central) accused the National Treasury of abusing Article 223 of the Constitution in the buyback, nearly 15 years after the initial sale of the telco.
“You are the PS, but cannot account for the billions irregularly used in the buyback. So, what happens next?” Dr Oundo asked.
Documents submitted to Parliament in 2022 show that just days before the August 9, 2022, General Election, the government “rushed” to acquire the 60 percent stake in Telkom Kenya held by the UK-based Helios Investors LLP and its Mauritius-based subsidiary Jamhuri Holdings Limited for Sh6.1 billion.
From left: Then ICT Cabinet Secretary Joe Mucheru, his National Treasury counterpart Henry Rotich and Helios Investment principal partner Pierre Heinrich during the sale of Telkom Kenya shares held by Orange East Africa to Jamhuri Holdings Limited at Treasury buildings in Nairobi in mid-June 2016.
Photo credit: File | Nation Media Group
The buyback was executed under Article 223, which permits the national government to spend money not previously approved by Parliament in emergencies or unforeseen expenditures.
However, the law requires the Treasury to seek post-facto approval within two months of the first withdrawal—an obligation the Treasury failed to meet.
Parliament declined to regularise the expenditure, arguing that the acquisition was not an emergency, had not been budgeted for, and that approval was sought in January 2023, well beyond the two-month window. The House subsequently directed the Finance and National Planning Committee to investigate the deal.
In 2023, the committee, chaired by Molo MP Kuria Kimani, tabled a report rejecting the transaction and declaring the expenditure irregular. A Cabinet despatch later said revoking the buyout would allow the transaction to be redone following proper due diligence.
“Parliament refused to approve this expenditure because it was suspicious, given the circumstances under which the payment was made. For how long can this matter remain an irregularity?” Dr Oundo asked.
“This is a unique case. But I am aware that some relevant agencies are taking action to recover the money,” he said.
The PS added that the government was working toward securing a strategic investor to take over Telkom’s operations, but requested more time to provide detailed information.
“The company was paid off and left without fulfilling its obligations. Now there is an accountability issue the PS must address because money was lost,” Ms Lesuuda said.
Mr Emathe argued that only a special audit would reveal the full scope of responsibility, including the reasons for the haste in executing the deal.
“This matter requires a special audit because we want to understand why the firm left and why Telkom is still struggling,” he said.
Dr Oundo rejected the PS’s plea for more time, noting that the Treasury had been aware of the issue since 2022, yet had not updated the country on efforts to recover the billions.
“This matter has been with you since 2022 and we all agree that the expenditure was unlawful and unconstitutional because Parliament did not approve it,” he said.
PS Kiptoo maintained that despite Helios’ exit, other strategic investors were lined up. He requested two weeks to furnish the committee with further details, adding, “there is an arbitration process going on, and with time we will be able to give more details.”
