Safaricom PLC headquarters in Westlands, Nairobi.
The payment of Sh244.5 billion to the National Treasury will take longer after the High Court extended the freeze on the sale of a 15 per cent stake in Safaricom Plc to parent firm Vodacom Group Limited.
A bench of three High Court judges ruled that plans for the sale of the stake should await the determination of petitions filed by four Kenyans, saying public interest would best be served by preserving the substratum of the case.
The court dismissed claims by the government that halting the transaction would hurt investor confidence.
Vodacom had prepared to wire billions of shillings to Kenya in anticipation that the High Court would lift the freeze on the deal.
This means the transaction will drag on, leaving the State in line to receive a Sh16 billion dividend from the 15 per cent stake if Kenya retains full ownership of its 35 per cent shareholding until August.
“Consequently, we do not buy into the argument that a constitutional adjudication automatically results in loss of confidence by investors,” the judges said.
“Such an argument, if accepted by this court, would lead to immunity from judicial review for public dealings because those dealings are economically motivated. That argument would run the supremacy of the Constitution afoul,” the judges added.
The freeze on the transaction has delayed the payment of Sh244.5 billion to the National Treasury, including Sh40.2 billion in advance dividends from what would be the government’s residual 20 per cent stake in the Nairobi Securities Exchange-listed firm.
Safaricom PLC headquarters in Westlands, Nairobi.
“We expect an update on this ruling on May 18, 2026. Pending this outcome, we’ll be able to finalise the deal very quickly,” said Vodacom Chief Executive Officer Shameel Joosub in a May 11 earnings call.
“If the conservatory orders are not lifted, the court case will continue, and it could take a few more months. So, we are a little bit in the court’s hands, and we will see what the court decides,” he added.
The transaction was frozen after petitioners Tony Gachoka and Fredrick Ogola sued several State agencies, Safaricom and Vodacom, questioning the legality of the government’s plan to reduce its stake in the telecoms giant.
The government defended the process, saying proceeds from the sale would be invested in an infrastructure fund, utilised prudently for public goods and used to reduce the country’s debt burden
Share sale price
It argued that the petitioners were seeking to stop a statutorily mandated process under Section 87A of the Public Finance Management Act and that the sale had already undergone parliamentary approval and public participation.
The court, however, said that while it appreciated the importance of economic stability and investor certainty, constitutional compliance could not be subordinated to commercial convenience.
“A quick reminder is that investor confidence in a constitutional democracy like ours is not founded upon the unchecked exercise of public power, but upon the assurance that the government acts within the confines of the Constitution and the law,” said the court.
The case was filed as analysts and politicians debated the merits of the government’s partial divestment from Safaricom, with a key issue being whether the State would obtain full value from the Sh34 per share sale price.
Some argued that the deal was good for Kenya, while others remained sceptical about the benefits of the transaction, viewing Vodacom as the ultimate winner after securing majority control of the profitable telecoms operator.
A joint parliamentary committee had approved the sale, paving the way for the conclusion of the transaction before the litigation was filed.
Under the deal, the National Treasury is to receive Sh204.3 billion for the 15 per cent stake, representing a price of Sh34 per share.
The exchequer is also set to receive a Sh40.2 billion dividend top-up, representing a loan backed by what will be Kenya’s remaining 20 per cent stake in Safaricom.
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