Vodacom's Safaricom deal struck down by Kenyan high court — A building on Vodacom’s campus in Midrand, Johannesburg

Kenya’s high court has declared the government’s sale of a 15% stake in Safaricom to Vodacom unconstitutional, null and void, and ordered the shares restored to the state — 11 weeks after the transaction closed and handed the South African group control of Kenya’s most valuable listed company.

The judgment was delivered on Tuesday by a three-judge bench of justices. It quashed the agreements, approvals and arrangements behind the divestiture and directed that the 15% holding be returned to the government of Kenya, to be held on behalf of Kenyans.

Vodacom said it will review the judgment and its implications. As interim steps, it will lodge an appeal with the court of appeal and apply for a stay pending the determination of that appeal. It said it would not be appropriate to comment further while the matter is before the courts.

In a separate announcement to shareholders through the JSE’s news service, Vodacom confirmed the judgment had been handed down and set out the same next steps, but did not say what the court had decided.

The petitioners — led by broadcaster Tony Gachoka and Prof Fredrick Ogola, with Wiper Party leader Kalonzo Musyoka appearing as senior counsel — challenged both the KSh34/share price and the process by which the stake was sold.

The bench held that disposing of a state asset of that size is a public policy decision, and that the constitution requires government to put such decisions to the public, with enough information for the consultation to mean anything. It found that neither the cabinet nor the national assembly met that standard.

‘Unexplained obscurity’

The judges also found that the government never told the public who the buyer was. It had engaged in “unexplained obscurity on the identity of the proposed buyer”, the court said, in remarks reported by The Kenya Times,and had misrepresented and concealed material information throughout the divestiture. Withholding documents during public participation, the bench held, turns the exercise into a formality and invalidates whatever comes out of it. TechCentral has not yet seen the written judgment.

The court found separately that the arrangements for ring-fencing the proceeds fell short, as Kenyan news site Uzalendo News reported. The national assembly approved the sale on condition the money went into the National Infrastructure Fund, but the court noted that parliament’s report referred to the fund’s enabling bill rather than the act that took effect on 25 March 2026, and that the fund board’s powers were broad enough to undermine the purposes the proceeds were meant to serve.

On 30 June, the Kenyan government sold just over six billion Safaricom shares — 15% of the company — to Vodafone Kenya at KSh34 each in a single block trade on the Nairobi Securities Exchange, raising KSh204.3-billion. It drew a further KSh40.2-billion as an advance on dividends from the 20% it kept, taking the total to KSh244.5-billion. Vodacom bought out Vodafone International Holdings’ remaining 12.5% of Vodafone Kenya the same day, lifting its effective interest in Safaricom from 35% to 55%. The 25% held by investors on the NSE was never part of the sale and is not touched by Tuesday’s orders.

The proceeds did not sit in a treasury account. They went into the National Infrastructure Fund, a state investment vehicle created under a law President William Ruto signed in March, which now holds about KSh340-billion, according to Kenyan technology publication tech-ish. Parliament’s finance committee, chaired by Molo MP Kuria Kimani, has found the fund’s investment policy thin on rules for risk assessment, project ranking and borrowing limits, tech-ish reported.

Vodacom has also started using the control it bought. Safaricom shareholders have since approved changes to the company’s articles that give Vodafone Kenya the right to nominate directors in proportion to its shareholding and a hand in the shortlist for Safaricom’s next chief executive — resolutions carried on the strength of the 55% stake.

The deal has reshaped Vodacom’s accounts, too. Safaricom moved from an equity-accounted associate to a consolidated subsidiary with effect from 30 June, a switch that underpinned an upgrade to the group’s medium-term earnings guidance and an increase in its 2030 revenue ambition to more than R300-billion.

Warned it could be unwound

When the court of appeal lifted the conservatory order on 26 June, it did not decide whether the sale was lawful. It said the opposite: that the transaction could be unwound if the petitioners eventually succeeded in the high court, and that all parties remained subject to Kenyan law, according to Kenyan legal news site Court Helicopter. Musyoka had argued the reverse — that once third-party rights arose, reversing the sale would become far harder in practice.

The substantive case was argued on 29 June. The government closed the block trade the next day, with judgment still pending.

Vodacom’s shares dropped sharply on the JSE shortly after 2pm on Tuesday, falling to R151 in the space of a few minutes — nearly 4% below Monday’s close of R156.95 — before recovering almost as quickly. The stock ended the day at R156, down 0.6%.

Judgment had been set down for delivery at 11am Nairobi time, four hours earlier, and the drop came before the first Kenyan news reports were published. That the recovery was nearly complete by the close suggests the market is pricing in a stay, or judging the practical reversal of a settled block trade unlikely, rather than reading the judgment as the end of Vodacom’s control of Safaricom.