Court Voids Vodacom’s Sh204bn Safaricom Stake Deal

Kenya’s High Court has nullified Vodacom’s purchase of a 15 per cent government stake in Safaricom, ordering the shares returned to the state, a ruling that unwinds a transaction Vodacom had already closed and folded into its ownership structure months earlier.

A three-judge bench of the High Court’s Constitutional and Human Rights Division ruled that the process used to divest the government’s shareholding in Safaricom breached the Constitution and several statutes governing the disposal of public assets, ordering that the stake be restored to the government.

Parliament had one condition for approving the sale: the money had to go into the National Infrastructure Fund, money meant to be ring-fenced strictly for infrastructure projects. But the court found two problems. First, the National Assembly report referred to the National Infrastructure Fund Bill No. 1 of 2026, rather than specifically referring to the National Infrastructure Fund Act, which came into force on March 25, 2026. Second, the actual law gives the fund’s board a lot of freedom in how it spends the money. That freedom means the money isn’t as protected as Parliament thought.

Separately, the judges found that the government had failed to hold robust public consultations, that the pricing framework used to value Safaricom was arbitrary, and that the competition implications of what amounted to a takeover had not been properly considered.

The petitioners, led by Tony Gachoka and Professor Fredrick Ogola, filed in early 2026, arguing the sale was an unlawful disposal of a strategic national asset. They also attacked the KES 34-per-share price itself. The High Court froze the sale in May, on grounds touching national security, data sovereignty, public participation and prudent use of public resources, despite the deal already having parliamentary approval and clearance from the COMESA Competition Commission.

That freeze didn’t hold. The Court of Appeal in Nairobi granted the Attorney General’s application to lift the conservatory order on June 26, 2026, and the acquisition was completed four days later, taking Vodacom’s effective shareholding in Safaricom to 55 per cent. On June 30, the government sold just over six billion shares, 15per cent of Safaricom , to Vodafone Kenya at KES 34 each in a single block trade, raising KES 204.3 billion (about USD 1.58 billion). It also drew KES 40.2 billion (about USD 310 million) as an advance on dividends from the 20per cent it kept, bringing Treasury’s total take to KES 244.5 billion (about USD 1.89 billion). Vodacom separately bought out Vodafone International Holdings’ remaining 12per cent stake in Vodafone Kenya the same day ,the move that took its effective interest in Safaricom from 35per cent to 55per cent.

Now that’s reversed, at least on paper. The government has said it will appeal to the Court of Appeal, but the High Court declined to suspend the judgment immediately, and Vodacom has said only that it will review the judgment and its implications. Safaricom’s shares dipped when the ruling came out, but recovered by the end of Tuesday’s trading, closing at around KES 36.50,  above the KES 34 the state had accepted for the stake in June. That suggests investors aren’t betting on a clean reversal. They seem to think either the ruling gets paused on appeal, or that unwinding a deal this large, already completed, just isn’t realistic.

However, despite all this,  the 25 per cent of Safaricom held by ordinary investors on the Nairobi Securities Exchange was never part of the sale and isn’t touched by this ruling, this is specifically about the government-to-Vodacom leg of the deal.