High Court Stops Government Safaricom Shares Sale

The High Court has declared the government’s process to sell part of its stake in Safaricom PLC unconstitutional after finding that citizens were not given enough information to participate meaningfully in the proposed transaction.

A three-judge bench ruled that the government failed to disclose the identity of the proposed buyer and withheld key documents and information concerning the planned sale.

The judges said the secrecy surrounding the transaction prevented both the public and Cabinet from properly assessing the proposed divestiture.

“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 said.

The ruling concerns the government’s 35 per cent stake in Safaricom, one of Kenya’s most strategically important companies and a major contributor to government revenues through taxes and dividends.

The court said the significance of Safaricom’s operations meant the government was required to observe strict constitutional standards of transparency and accountability before making a decision on the sale.

The judges found that the public participation exercise fell short of those requirements because citizens were not given access to critical information about the transaction.

The court cited documents such as valuation reports, sale agreements and information about the prospective buyer as material details that should have been disclosed.

“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 bench ruled.

The judges emphasised that public participation cannot be reduced to simply inviting members of the public to meetings or publishing notices. Citizens must be given sufficient information to understand a proposal and express informed views before a decision involving public assets is made.

The case arose amid the government’s broader privatisation programme, which seeks to reduce state ownership in selected corporations and raise funds through the sale of government shares.

Safaricom was among the companies identified for partial divestiture, with the government seeking to sell a portion of its 35 per cent holding.

Petitioners opposing the process had questioned the secrecy surrounding the transaction and argued that Kenyans had not been given adequate opportunity to scrutinise the proposed sale.

They also challenged the level of parliamentary involvement and the failure to reveal the identity of the buyer.

The High Court found that these concerns were justified, holding that the concealment of material information undermined the constitutional requirement for meaningful public participation.

The judgment places the Safaricom divestiture process on hold and requires the government to comply with constitutional requirements if it decides to pursue the transaction again.

The decision could have consequences beyond Safaricom, particularly for other planned sales of state-owned assets where public participation is required.

The Attorney General has not yet announced whether the government will challenge the judgment before a higher court.