It’s a Record Reverse Call on Waiyaki Way: High Court Nullifies Sh204.3B Safaricom Stake Sale to Vodacom

Nairobi, September 15, 2026 — The High Court has declared the Government of Kenya's sale of a 15 per cent stake in Safaricom PLC to Vodacom Group unconstitutional, null and void. The court ordered the shares restored to the state. The ruling came barely eleven weeks after the transaction was executed.

A three-judge bench heard the case. It comprised Justices Francis Gikonyo, Roselyne Aburili and Tabitha Ouya. The judges found several problems with the divestiture. Public participation was inadequate. Material information was concealed. The pricing process was arbitrary. The government also failed to address national security concerns. Those concerns arose from the transfer of effective control to foreign investors.

"In light of our findings above, we hold that there was no reasonable, meaningful and purposive public participation in respect of the divestiture, thus violating Articles 10 and 118 of the Constitution," the judges ruled.

The Transaction

The sale was valued at approximately Sh204.3 billion. It involved 6,009,814,200 Safaricom shares, or 15 per cent of the company.

The shares were sold to Vodafone Kenya at Sh34 apiece. The trade happened in a single block on the Nairobi Securities Exchange on June 30.

The government also drew down Sh40.2 billion. This was an advance on dividends from its remaining 20 per cent holding. Total proceeds reached about Sh244.5 billion.

Most of that money went into the newly established National Infrastructure Fund.

The trade changed the ownership structure significantly. Vodafone Kenya's holding rose from 40 per cent to 55 per cent.

The Government's direct stake fell from 35 per cent to 20 per cent. According to the court, this shift handed Vodacom effective control of East Africa's largest telecommunications operator.

In the weeks that followed, Safaricom shareholders approved further changes. They gave Vodacom the right to name the shortlist for the company's next chief executive. Vodacom carried that resolution using its enlarged voting bloc.

Contested Path

The ruling caps a turbulent six-month legal battle. The High Court first froze the transaction on March 23. A three-judge bench extended those conservatory orders on May 18.

Petitioners had argued that the sale raised constitutional concerns. They also cited threats to data sovereignty. They warned of risks in transferring control of a strategic national asset to a foreign entity.

The Treasury, Safaricom, Vodacom and the Attorney-General appealed that decision, and they succeeded. On June 26, the Court of Appeal lifted the High Court's injunction.

It found that the freeze had hindered a time-sensitive transaction tied to infrastructure financing. The court noted that any transfer could, in principle, be reversed later. That would depend on the outcome of the underlying petitions. The sale closed four days after that ruling.

Tuesday's judgment is the substantive determination of those same petitions. It has gone against the government

Court's Findings

The bench went beyond the public participation deficit in its findings. It found that the government engaged in what it called "unexplained obscurity" over the identity of the proposed buyer.

The judges also found that the government made misrepresentations. Material information was withheld throughout the process. The court further faulted the pricing methodology behind the Sh34-per-share valuation.

It held that the transaction's national security implications were never adequately addressed. This was a problem given the degree of foreign control the deal conferred over critical telecommunications infrastructure.

The court quashed every agreement, approval and arrangement underpinning the divestiture. It ordered the 15 per cent stake restored to the Government of Kenya. The shares are to be held on behalf of the Kenyan public.

What It Means

Legally, the judgment reasserts two constitutional guardrails. Both have featured prominently in recent Kenyan jurisprudence on public asset transactions.

Article 10 entrenches public participation as a national value. It binds all state organs. Article 118 requires Parliament and its processes to facilitate public involvement in matters of national consequence.

Courts have increasingly treated consultation as a substantive precondition for validity. This applies to major privatisations. It is not treated as a mere procedural formality. This ruling extends that reasoning to strategic corporate divestitures.

Practically, the decision creates significant uncertainty. Vodacom has already begun exercising rights tied to its enlarged shareholding. This includes influence over Safaricom's leadership succession.

Unwinding a completed, cross-border share transfer is not simple. It raises complex questions of corporate law. Securities regulation is also implicated.

International investment protection issues arise too. The ruling does not resolve these on its face. An appeal is widely expected. The matter could plausibly return to the Court of Appeal or the Supreme Court.

That would extend the uncertainty that has already surrounded this transaction for the better part of a year.

For the National Treasury, the ruling also disrupts financing plans. The National Infrastructure Fund had absorbed most of the sale proceeds. It also held receipts from the Kenya Pipeline Company IPO. The fund's investment framework was itself under parliamentary scrutiny before the judgment.

The Departmental Committee on Finance and National Planning had flagged gaps. These concerned the fund's risk-assessment and exposure rules.

Both Safaricom and Vodacom have yet to issue detailed statements on the judgment. The Government has not confirmed whether it will appeal.