The battle over one of Kenya's biggest corporate transactions is heading back to court.
The government says it will appeal a High Court ruling ordering the cancellation of the sale of an additional 15 per cent stake in Safaricom to South Africa's Vodacom.
Treasury Cabinet Secretary John Mbadi says the government maintains that the transaction was lawful.
“We intend to make that case fully on appeal. The National Treasury will pursue this appeal vigorously,” Mbadi said.
Vodacom has also said it will appeal.
The transaction was announced in December and completed in June. It was valued at about $1.6 billion, roughly KSh200 billion depending on the exchange rate.
It increased Vodacom's stake in Safaricom to 55 per cent while reducing the Kenyan government's holding to 20 per cent.
But the High Court ruled against the transaction this week.
According to reporting on the judgment, the court found that the process had not adequately involved the public and raised concerns over disclosure of material information. It ordered the 15 per cent stake returned to the government.
The Treasury disputes that finding.
That leaves Safaricom, its shareholders and millions of Kenyans watching a complicated legal battle over the ownership of one of the country's most valuable companies.
So what happens now?
An appeal means the dispute is not necessarily settled by the High Court decision. The appellate process could determine whether the transaction ultimately survives, is reversed or faces further legal requirements.
Safaricom itself has said it is reviewing the judgment and its implications.
The case also goes beyond Safaricom.
The government has been seeking ways to raise money and manage heavy debt obligations. The stake sale formed part of that broader effort to unlock value from state assets.
Reuters reports that debt repayments absorb about 40 per cent of government revenue.
That creates two competing public questions likely to remain at the centre of the dispute.
How should Kenya raise money from valuable public assets when finances are tight? And what level of public participation and disclosure should be required before the state sells a major shareholding in a company as strategically important as Safaricom?
Those questions will now follow the transaction into the appeal.
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