Vodacom Group said on Friday that its Kenyan subsidiary will stay the registered owner of the Safaricom shares that gave it control of the operator, at least for now.
This follows a decision by Kenya’s court of appeal to fast-track Vodacom’s challenge to a ruling that cancelled the deal. The court also ordered that things stay as they are until the appeal is heard, according to Vodacom.
In a statement to investors, the JSE-listed company said the court “decided not to determine the application but instead recorded to fast-track the substantive appeal”.
The court heard Vodacom’s request for a stay on 13 October. Vodacom said the result is that its subsidiary, Vodafone Kenya, remains “the registered holder of the Safaricom shares” it bought from the Kenyan government on 30 June.
The company said the money it paid the government “is to be preserved, pending the hearing of the appeal”. Vodacom also said it “remains confident in the strategic rationale for the acquisition”.
Vodacom’s account differs from several reports in the Kenyan press, TechCentral reported. Those reports said the court had turned down the applications by the government and Vodacom to suspend the high court’s judgment “for lack of merit”.
According to those reports, the order that the shares go back to the state is still in force.
Vodacom’s statement did not give a date for the appeal hearing. It also did not say whether Vodacom will keep including Safaricom’s results in its own accounts. It started doing that from 30 June.
The deal was announced in December. Vodacom paid KSh34 a share for 15% of Safaricom from the Kenyan government and an effective 5% from its parent company, Vodafone.
That raised its stake from about 35% to 55%. It gave Vodacom majority control of Kenya’s biggest telecoms operator for the first time since Safaricom listed in 2008.
The Kenyan government received KSh204.3 billion for its shares. It was also paid KSh40.2 billion in advance of future dividends.
The deal was frozen in March after a petition by broadcaster Tony Gachoka, academic Fredrick Ogola and opposition leader Kalonzo Musyoka. The court of appeal lifted that freeze on 26 June, and Vodacom completed the purchase four days later.
On 15 September, the high court declared the sale “unconstitutional, null and void”. It found that the government had not consulted the public properly and ordered the shares returned to the state.
Kenya’s treasury and Vodacom both said they would appeal that ruling.
If the judgment stands, Vodacom’s stake would drop to about 40% and it would lose its majority in Safaricom. The 5% it bought from Vodafone is not affected by the ruling.
Source: this article is based on reporting by TechCentral. Image: TechCentral. Written with the help of AI and published by the Tzaneen Voice Technology desk. See our Editorial Standards.
Werner Jacobs covers technology for Tzaneen Voice. Werner reports on mobile networks, data prices, internet access, smartphones, apps, AI, cybersecurity and South African tech companies. Each story explains what a new product, price change or policy means for ordinary users in South Africa.