The Kenyan Cabinet has made a significant decision to cancel the government’s intended purchase of a 60 percent stake in Telkom Kenya, valued at slightly over Ksh6 billion. Instead, the government now seeks a refund of the amount from Jamhuri Holdings and Helios Investment Limited, the parties involved in the buyout deal.
In a statement released to the press after the Cabinet meeting, it was stated that the decision to cancel the purchase was made in response to governance challenges posed by the nationalization of Telkom Kenya Limited in the lead-up to the previous year’s General Election.
“In addressing the governance challenges posed by the nationalization of Telkom Kenya Limited in the run-up to last year’s General Election, Cabinet rescinded the decision that the Government of Kenya shall purchase from Jamhuri/Helios sixty percent (60%) of the ordinary shares of Telkom Kenya,’’ read part of the cabinet’s statement.
As a result of this decision, Jamhuri/Helios will be required to refund the government the amount that was initially paid for the takeover. This move provides Telkom Kenya with an opportunity to seek and bring on board another strategic investor, pending regulatory approvals, with the aim of enhancing its operational capacity and competitiveness in the telecommunications market.
Read Also: Telkom Kenya is now a fully owned state Parastatal after Helios Exit
The controversy surrounding the Telkom Kenya buyout earlier this year took an unexpected turn when former Treasury Cabinet Secretary Ukur Yatani revealed that the government was the majority shareholder. Yatani, while appearing before a Parliamentary committee investigating the buyout, clarified that all transfer documents were held at the National Treasury.
However, he noted that the shareholding status had not been changed at the State law office at the time, as the Telkom Kenya board responsible for initiating these changes was not properly constituted.
He emphasized that the payment had been approved following a sitting by the National Security Advisory Council, which aimed to ensure that Telkom was fully government-owned due to its role in handling critical security installations, including offices such as the President’s office, State House, Defense headquarters, the National Intelligence Service, and the IFMIS portal.
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In addition to this development, the Cabinet has provided Telkom Kenya with an opportunity to bring in another strategic investor, boosting its competitiveness in the telecommunications industry. The decision to cancel the government’s purchase of Telkom Kenya’s stake and seek a refund underscores the evolving dynamics in Kenya’s telecom sector.
