The Kenyan High Court ruled that the state's sale of a 15% stake in Safaricom to Vodacom is unconstitutional, invalid, and nullified. The court ordered the return of these shares to the state—this occurred 11 weeks after the deal, which transferred control of Kenya's most valuable public company to the South African group, was finalized.
Decision of the Kenyan High Court
The ruling was delivered on Tuesday by a panel of three judges. It overturned all agreements, approvals, and arrangements related to the divestiture and mandated the return of the 15% stake to the Kenyan government to be held on behalf of Kenyan citizens. Vodacom stated that it would study the decision and its implications. As a temporary measure, the company will appeal to the Court of Appeal and request a stay of the decision pending the ruling on this appeal. The company added that further comments are unwarranted while the matter is under judicial review.
In a separate announcement to shareholders via the JSE news service, Vodacom confirmed the ruling and listed the same subsequent steps but did not disclose the specific decision made by the court.
The plaintiffs, including television presenter Tony Gachoka and Professor Fredrick Ogola, with party leader Kalonzo Musyoka as senior counsel, challenged both the price of 34 Kenyan shillings per share and the sale process itself.
Unexplained Opacity
The judges concluded that the realization of a state asset of this magnitude should be a matter of state policy, and that the constitution requires the government to present such decisions to the public, providing sufficient information for consultations to be meaningful. It was found that neither the cabinet nor the national assembly met this standard.
The courts also discovered that the government had never informed the public who the buyer was. As reported in The Kenya Times, the court noted 'unexplained opacity regarding the identity of the prospective buyer' and that substantial information was presented and concealed throughout the divestiture process. The panel ruled that concealing documents during public participation renders the event a formality and voids any results obtained.
Separately, the court determined that the revenue reservation agreements were insufficient, according to the news platform Uzalendo News. The National Assembly approved the sale on the condition that the funds would go into the National Infrastructure Fund, but the court pointed out that the parliament's report referenced a bill regulating this fund, not the act that came into force on March 25, 2026, and that the fund council's powers were broad enough to undermine the intended purpose of the revenue.
On June 30, the Kenyan government sold just over six billion Safaricom shares—15% of the company—to Vodafone Kenya at a price of 34 Kenyan shillings per share in a single block deal on the Nairobi Stock Exchange, generating revenue of KES 204.3 billion. Additionally, an extra KES 40.2 billion was received as an advance dividend from 20%, which remained with the state, totaling KES 244.5 billion. On the same day, Vodacom acquired the remaining 12.5% of Vodafone International Holdings in Vodafone Kenya, increasing its effective stake in Safaricom from 35% to 55%. The 25% of shares held by NSE investors were not part of the sale and were unaffected by the rulings issued on Tuesday.
The proceeds were not placed in the treasury account; they were directed to the National Infrastructure Fund—a state investment instrument created by a law signed by President William Ruto in March, which currently holds about KES 340 billion, according to the Kenyan tech publication tech-ish. The parliamentary finance committee, led by MP Molu Curia Kimani, found that the fund's investment policy lacked sufficient regulation regarding risk assessment, project ranking, and credit limits.
Vodacom also began exercising the control it gained. Safaricom shareholders subsequently approved changes to the company's articles of association that grant Vodafone Kenya the right to appoint directors proportionally to its ownership stake and participate in shortlisting the next Safaricom CEO—these resolutions were passed thanks to the 55% stake.
The deal also changed Vodacom's reporting. Safaricom transitioned from being classified as an associate accounted for at fair value to a consolidated subsidiary as of June 30, which served as the basis for raising the group's medium-term revenue forecast and increasing revenue ambitions to over KES 300 billion by 2030 [R].
Warning of Potential Deal Unwinding
When the Court of Appeal lifted the injunction on June 26, it did not rule on the legality of the sale. Instead, it stated the opposite: that the deal could be unwound if the plaintiffs ultimately succeed in the High Court, and that all parties remain under Kenyan jurisdiction. Musyoka argued the contrary—that once third-party rights arise, unwinding the sale would become much more difficult in practice.
The substantive hearing took place on June 29. The government closed the block deal the following day, even before the ruling was issued.
Vodacom's shares sharply dropped on the JSE shortly after 2 PM on Tuesday, falling to 151 [R] within minutes—nearly 4% below Monday's close of 156.95 [R]—before recovering almost as quickly. By the end of the day, the stock closed at 156, down 0.6%. The decision was scheduled for 11 AM Nairobi time, four hours earlier, and the drop occurred before the first Kenyan news reports were published. The near-full recovery by the close suggests that the market is pricing in the possibility of a stay of the decision or considers the practical reversal of the completed block deal unlikely, rather than interpreting the ruling as the end of Vodacom's control over Safaricom.
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