High Court Nullifies Government’s Ksh 204B Safaricom Stake Sale to Vodacom

Following the completion of Vodacom Group’s transaction to acquire a controlling 55% stake in Safaricom PLC, Kenya’s High Court has ordered the transaction nullified and the 15% shareholding to be restored to the State.

The ruling, delivered by a three-judge bench comprising Lady Justice R. E. Aburili, Hon. Justice Francis Gikonyo, and Hon. Lady Justice Ouya Tabitha Wanyama, halts the Ksh 244.5 billion transaction that had previously closed on June 30, 2026, in a single block trade on the Nairobi Securities Exchange.

The High Court declared Sessional Paper No. 3 of 2025 and all associated regulatory approvals unconstitutional, finding that the divestiture breached core principles of public participation, transparency, and national security.

Although parliamentary committees held public hearings across 30 counties, the judges highlighted that key transaction documents, including the Share Purchase Agreement and agreements concerning future dividend rights, were withheld from the public.

Highlighting the lack of transparency, the bench issued rebuke of the executive’s handling of the deal: “We accordingly find that the Government of Kenya engaged in unexplained obscurity on the identity of the proposed buyer, made misrepresentation and concealed material information in respect of the partial divestiture throughout the process.”

Addressing the state’s public engagement efforts, the judges emphasized that civic participation cannot merely be a procedural formality: “Concealing or withholding material information and documents during public participation violates constitutional transparency requirements and invalidates the resulting policies or projects because it renders public engagement a cosmetic formality rather than a meaningful exercise.”

In addition to procedural opacity, the bench noted that allowing effective foreign control of 55% over Safaricom raised severe national security concerns, as well as potential violations of competition and capital markets laws regarding critical national infrastructure and mobile money services like M-Pesa.

The nullified deal involved two primary financial components executed by the National Treasury. The first was a direct share purchase, where a 15% stake, which is an equivalent to 6 billion shares, was sold at Ksh 34 per share, totaling Ksh 204.3 billion. The second component was future dividend monetization, which involved an advance payment of Ksh 40.7 billion against future dividends on the remaining 20% stake held by the State. Combined, these components brought the total proceeds from the deal to Ksh 244.5 billion.

The executive, through its Attorney General Dorcas Oduor, has moved to challenge the High Court’s ruling by formally serving a Notice of Appeal to the Court of Appeal.

“Take notice that, the Honourable Attorney General, the 5th Respondent herein, being dissatisfied with the judgment of the Court and orders of Honourable Lady Justice R. E. Aburili, Hon. Justice Francis Gikonyo and Hon. Lady Justice Ouya Tabitha Wanyama given at Nairobi on the 15th day of September, 2026, intend to appeal at the Court of Appeal against a part of the said decision,” the notice reads.

Read Also: Vodacom Group Completes Strategic 55% Acquisition of Kenya’s Safaricom PLC

Defending the transaction, National Treasury Cabinet Secretary John Mbadi emphasized that the Ksh 204.3 billion sale was a “considered fiscal measure structured to unlock value for the Exchequer while safeguarding the strategic character of an institution that touches the daily lives of over 50 million Kenyans.

He argued that the constitutional right to development must be balanced alongside other state obligations and affirmed that the Treasury will “pursue this appeal vigorously.

“The National Treasury will pursue this appeal vigorously and provide further updates as the matter progresses through the courts,” he stated.

Vodacom Group also filed its own notice of appeal to safeguard its $1.9 billion investment. Beyond challenging the High Court’s findings, Vodacom’s legal team is seeking an emergency stay of execution at the Court of Appeal to prevent the immediate reversal of the shares while the substantive appeal is considered.

Meanwhile, the petitioners’ lead counsel, Wiper party leader Stephen Kalonzo Musyoka, praised the judgment as a victory for constitutionalism. Kalonzo maintained that Safaricom is a non-negotiable strategic national asset handling critical data, mobile financial networks, and telecommunications infrastructure that cannot be privatized without full transparency.

Safaricom PLC, in an official market announcement published in the Daily Nation on September 17, 2026, stated: “Safaricom PLC (“Safaricom”) notes the High Court of Kenya’s judgment on 15th September 2026, regarding the Government of Kenya’s divestiture of 15% of its shareholding in Safaricom to Vodafone Kenya Limited and effectively Vodacom Group Limited in which the Court has ruled against the divestiture.

The transaction had been completed on 30th June 2026 following the lifting of conservatory orders by the Court of Appeal and the fulfilment of relevant conditions precedent.“

“Safaricom is reviewing the judgment and its implications. Given that the matter remains subject to legal processes, further updates will be provided in due course and as appropriate.”

“As Safaricom, we will continue serving Kenya and Ethiopia, by connecting people and businesses to opportunities, empowering communities, addressing societal challenges through technology, and most importantly transforming lives.”

If upheld on appeal, the court’s order will require Vodacom’s effective ownership to revert from 55% back to 39.9%, while restoring the Kenyan government’s direct shareholding from 20% back to 35%.