Kenya’s High Court has declared the government’s sale of a 15% stake in Safaricom to Vodacom Group unconstitutional and ordered the shares returned to the state, putting a KES 204.3 billion ($1.58 billion) deal at risk less than three months after it closed.
A three-judge bench ruled on Tuesday that the transaction breached constitutional requirements, finding inadequate public participation, concealment of material information, and a process that misrepresented the nature of the deal. The court said the sale effectively amounted to a transfer of control rather than a simple partial divestiture and ordered the 15% stake restored to the government on behalf of Kenyans.
The government had sold the stake at KES 34 per share in a deal completed at the end of June 2026. Vodacom’s effective shareholding in Safaricom rose to about 55%, while the state’s holding fell to 20%. The government also received an upfront payment linked to future dividend rights on its remaining stake.
The sale formed part of Kenya’s broader effort to raise funds from state assets for infrastructure and fiscal needs. It faced multiple constitutional petitions arguing that the disposal of a strategic public asset required stronger transparency, meaningful public participation, and clearer consideration of national security and data sovereignty issues.
An earlier High Court conservatory order had temporarily blocked the deal. Kenya’s Court of Appeal later lifted that freeze, allowing the transaction to proceed while the substantive case continued. The High Court has now ruled on the merits and quashed parliamentary approvals and related actions tied to the sale.
Vodacom has indicated it will appeal the decision to the Court of Appeal and seek a stay of the High Court order. The outcome will determine whether the shares must be returned and what financial adjustments follow, including any repayment of the purchase consideration.
The ruling marks a significant legal setback for one of the largest recent corporate transactions in Kenya’s telecom sector and raises fresh questions about the process for disposing of state-owned stakes in strategic companies. Safaricom remains East Africa’s largest mobile operator and a key player in mobile money through M-Pesa.
