South Africa’s Vodacom is set to keep its controlling 55 percent stake in Safaricom while Kenya’s Court of Appeal considers a challenge to the recent sale of an additional 15 percent shareholding.
The deal, which increased Vodacom’s ownership and gave it majority control of the Kenyan mobile operator, remains under legal review linked to the government’s decision to sell part of its holding.
The transaction was completed at the end of June after earlier court restrictions were lifted. Vodacom, through its subsidiary, bought the 15 percent stake from the Kenyan government and an effective further interest from its parent company.
This raised its overall stake to about 55 percent, while the government’s holding dropped to 20 percent.
The sale formed part of efforts by Kenyan authorities to raise funds from state assets.
In mid-September, the High Court in Nairobi ruled that the sale did not fully meet legal requirements, including adequate public participation and compliance with public finance rules.
The court ordered that the 15 percent stake be returned to the government. Both the National Treasury and Vodacom said they would appeal the decision.
On 13 October the Court of Appeal heard applications related to the case. Instead of deciding on a temporary freeze of the High Court orders, the judges directed that the appeal itself be heard on a fast-track basis in the public interest.
They ordered that the current position be maintained until the appeal is decided. This means Vodafone Kenya, the Vodacom subsidiary, remains the registered holder of the shares bought from the government, and the money paid for those shares is to be preserved for now.
Vodacom has told investors it remains confident in the reasons for the acquisition and will continue to update shareholders as the case proceeds. The matter is due to return to the court registry for further directions.
Safaricom itself has said it is reviewing the earlier judgment and its effects.
The legal process continues to examine how the government handled the disposal of the shares. Until the Court of Appeal delivers its ruling, Vodacom holds the majority stake it acquired, and the status of both the shares and the purchase funds stays unchanged.
The outcome will determine whether the ownership structure put in place in June remains in place or is reversed.
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