The Lower Eastern Times Opening The Third Eye
The government and Vodacom have suffered a setback after the Court of Appeal declined to suspend a High Court ruling that overturned the Sh204.3 billion sale of the State’s 15 per cent stake in Safaricom.
On Tuesday, a three-judge bench comprising Justices Luka Kimaru, Francis Tuiyott and Kathurima M’Inoti dismissed applications by the government and Vodacom seeking to halt the implementation of the September 15 judgment as they pursued an appeal.
“We therefore reject the government’s and Vodacom’s applications to suspend the High Court judgement pending the determination of their intended appeal for lack of merit,” the judges ruled.
The decision means the High Court orders declaring the transaction unconstitutional remain in force, including the directive to return 6,009,814,200 ordinary shares to government ownership.
The legal dispute centres on the transfer of the shares, equivalent to 15 per cent of the government’s stake in Safaricom, to Vodafone Kenya Ltd, a subsidiary of the Vodacom Group.
In its September 15 decision, the High Court ruled that the divestiture was unconstitutional and declared it invalid, null and void.
Justices Francis Gikonyo, Roselyn Aburili and Teresia Wanjiku also overturned Sessional Paper No. 3 of 2025, together with the approvals and agreements that formed the basis of the transaction.
Government Warns of Complications if Sale Is Reversed
The transaction was completed on July 6, with the government receiving approximately Sh204.3 billion from the sale. An additional Sh40.168 billion was paid in lieu of future dividends on the State’s remaining shareholding.
Attorney General Dorcas Oduor had urged the Court of Appeal to suspend the High Court ruling, arguing that implementing the orders before the appeal was determined could weaken the government’s case and make it more difficult to reverse the transaction.
Treasury Cabinet Secretary John Mbadi supported the application through an affidavit, stating that the shares had already been transferred and that reversing the sale would require changes to completed entries at the Central Depository and Settlement Corporation.
Mbadi also raised concerns over cross-border regulatory approvals, warning that reversing the transaction could affect government fiscal planning, investor confidence and Kenya’s foreign-exchange position.
The government further argued that the deal had brought in approximately US$1.557 billion in foreign currency and that undoing it could require the repayment or withdrawal of a substantial capital inflow.
State Vows to Challenge High Court Decision
The government maintained that its intended appeal raised significant legal questions, including how Section 87A of the Public Finance Management Act should be interpreted.
It also questioned the High Court’s findings on Parliament’s role in approving the sale and the decision to invalidate the regulatory approvals underpinning the transaction.
The application was opposed by Tony Gachoka and other petitioners, who challenged the legality of the sale on several grounds.
Their objections included concerns about public participation, the valuation of the shares and the procedures followed in approving the transaction.
The Court of Appeal’s latest decision leaves the High Court judgment in place while the government and Vodacom pursue their intended appeal, prolonging the legal uncertainty surrounding the multibillion-shilling Safaricom transaction.
