Court Faults Government Over Safaricom Shares Sale, Cites Lack of Public Participation and Concealment of Buyer Identity
Key documents, including valuation reports, sale agreements and details of the prospective buyer, were never made public.
Photo: Courtesy.
By Robert Mutasi
A three-judge bench of the High Court has faulted the government over the partial divestiture of its shares in Safaricom PLC, ruling that the process was conducted without adequate public participation and involved the concealment of key documents and material information.
In a strongly worded judgment, the court said the lack of transparency made it difficult for the Cabinet to objectively evaluate the proposed divestiture in accordance with the Constitution, and rendered the entire process constitutionally flawed.
The bench found that the government failed to disclose the identity of the proposed buyer and made misrepresentations while withholding material information relating to the sale of the strategic state stake in the country’s most profitable company.
“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,” the court ruled.
The judges held that the decision to sell part of the government’s shareholding in Safaricom — a company in which public interest is immense due to its dominance in telecommunications, mobile money and its contribution to the Exchequer — required rigorous public engagement and full disclosure as mandated under Article 10 and Article 201 of the Constitution.
According to the court, the government merely went through the motions of public participation without providing citizens with the necessary information to interrogate the deal. Key documents, including valuation reports, sale agreements and details of the prospective buyer, were never made public.
The bench said withholding or concealing material information during a public participation process undermines constitutional requirements on transparency and accountability.
“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,” the court added.
The judges emphasized that public participation must be meaningful and informed, requiring the government to provide citizens with sufficient information to enable them to engage effectively in decisions involving public assets. They noted that participation without information is illusory and contrary to the principles of good governance.
The ruling is a major blow to the National Treasury’s privatization drive, under which the state had planned to reduce its stake in several parastatals and state corporations to raise revenue and improve efficiency. Safaricom, in which the government holds a 35 percent stake, was among the crown jewels earmarked for partial divestiture.
Petitioners who challenged the sale had argued that the process was shrouded in secrecy, that Parliament was not adequately involved, and that Kenyans were being denied the opportunity to understand who was acquiring a strategic national asset and at what price.
The court agreed, stating that the unexplained obscurity around the buyer’s identity and the misrepresentation of facts made it impossible for both the public and the Cabinet to make an informed decision.
The judgment now invalidates the process undertaken so far, compelling the government to restart the divestiture afresh in full compliance with constitutional requirements on transparency, accountability and meaningful public participation, should it still wish to proceed with the sale.
The Attorney General is yet to comment on whether the government will appeal the decision.
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