UK-based private equity fund Helios Investment Partners still officially owns a majority stake in Telkom Kenya, nearly eight months after Kenya paid Sh6.09 billion to purchase the stake, the registrar of companies told lawmakers yesterday.
Business Registration Service (BRS) Director-General Kenneth Gathuma told MPs that Telkom is still a private entity majority-owned by Helios through Jamhuri Holdings Limited, despite the stake sale that is under inquiry by lawmakers.
Mr Gathuma was appearing before a joint sitting of the National Assembly’s Departmental Committee on Finance and National Planning and Committee on Communication, Information and Innovation yesterday, alongside then Solicitor-General Kennedy Ogeto.
The officials from the Attorney-General’s office were summoned by the joint committee to reveal the ownership details of Helios and Jamhuri as well as the legal opinion that the office gave on the transaction.
Helios, which is registered in the Cayman Islands, owns 100 percent of Jamhuri which is registered in Mauritius.
This comes a month after Telkom management failed to appear before the Finance committee alongside ICT Cabinet Secretary Eliud Owalo during ministerial submissions for the first supplementary budget for the financial year 2022/23.
Mr Owalo told MPs that the Telkom officials indicated they were not a State agency despite the government’s acquisition of the company and the Executive Order No. 1 of 2023 that listed Telkom as a State agency under the State Department of Broadcasting and Telecommunication.
“We have the government of Kenya with a shareholding of 43.12 per cent and Jamhuri which is the foreign company has a shareholding of 56.88 per cent,” Mr Gathuma told the joint committee.
Mr Gathuma said that from its records, Telkom is still a privately-owned entity and that the ownership particulars have never been changed despite the government’s full purchase of the company.
The MPs queried whether taxpayers risk losing the billions of shillings paid to Helios owing to the fact that Jamhuri is still registered as the majority shareholder of Telkom.
“The Attorney-General’s office has shown that the shareholding of Telkom has not changed. Does that mean that we will lose the Sh6.09 billion that was paid by the government?” posed Kitui Rural MP David Mboni.
The meeting comes after MPs failed to approve the spending of the Sh6.09 billion that was paid to Helios last year under Article 223 of the Constitution.
Article 223 allows the Treasury to withdraw money from the Consolidated Fund Services without the approval of Parliament but to seek the approval within two weeks once Parliament resumes sittings.
MPs said they would only approve the expenditure after thorough investigations that seek to establish whether taxpayers got value for money in the Telkom deal.
Controller of Budget Margaret Nyakang’o told the joint committee that the government had a deadline of July 29, 2022 to pay the money for it to fully acquire Telkom after which the deal would have become null and void.
Dr Nyakang’o told legislators that the agreement for sale of a 60 per cent stake in Telkom Kenya to the government from Helios would have collapsed had State officials failed to pay the money before that deadline.
The committee put the budget controller to task over her approval for the National Treasury to withdraw money from public coffers to complete the transaction without Parliament’s approval.
The transaction, Ms Nyakang’o revealed, was initiated on July 25, 2022 and was closed within seven days on August 2, 2022.
