Parliament approves sale of Safaricom shares amid opposition from MP

The National Assembly yesterday approved the government’s sale of its 15 per cent stake in Safaricom to Vodacom Group, in a move expected to raise over Sh204 billion to bolster infrastructure projects in the country. 

Lawmakers adopted the joint report of the Public Debt and Privatisation Committee and the Finance Committee which recommended that the House adopts its report on the sale, further introducing new safeguards to ensure safeguards to guide the process.  

The development, however, came amid opposition from Suba South MP Caroli Omondi who questioned whether it was lawful for the House to debate the motion given that there was an ongoing Court case on the same.  

The joint committee, in its recommendations indicated that the National Treasury Cabinet Secretary should also ensure that within 10 years of divestment, the current shared prosperity business model at Safaricom remains largely unchanged in a way that does not harm existing Safaricom dealers, agents, or other business partners.

It also held that no current employees should be made redundant.

The joint committee, co-chaired by Molo MP Kimani Kuria and Mbalambala MP Shurie Abdi, emphasised the importance of protecting current staff jobs and assured that there will be no redundancies arising from Safaricom acquisitions.

The report added that the House should decide on an effective date for approval, which could be April 1 or a later date once all regulatory approvals, forming the conditions precedent of Section 4.1 of the share purchase agreement, have been obtained.

It further suggested that the National Treasury Cabinet Secretary will, upon receiving all the regulatory approvals required under paragraph 4.1 of the share purchase agreement, undertake and finalise the transaction via the block trade platform on the Nairobi Securities Exchange (NSE).

The House team also recommended that upfront payments be made in place of future dividends that the Government will receive, totaling Sh40 billion and Sh200 million, which sums to Sh40.2 billion, as an upfront payment for future dividends on the remaining 20 per cent shareholding, as detailed in the dividend share agreement.

Furthermore, the report states that, notwithstanding any provisions in the share purchase and dividend purchase agreements, the proceeds from the divestment will be directed into the  National Infrastructure Fund (NIF).

Disquiet however, erupted during the debate of the report after MP Omondi sought to halt the debate of the same, citing an ongoing Court case on the controversial sale of government shares in Safaricom PLC. 

Rising on a point of order, Omondi questioned whether the House was acting within the confines of the law by debating the motion given that there was a live case in court with a ruling yet to be issued. 

“ I rise under Standing order 89 to inquire whether it is in order for this matter to proceed when we are aware there is a pending  Court case where the Court consolidated three petitions and noted that it issued immediate conservatory orders stopping the process of divestiture of Safaricom…,” noted the lawmaker. 

National Assembly Speaker Moses Wetangula however, allowed for debate to proceed, noting that Parliament was not party to the Court proceedings. 

“The orders given are not directed towards Parliament and neither do they affect Parliament…This House has Constitutional responsibility to transact all business before it and whoever wants to challenge this process can wait for the outcome and go to Court.Nobody can inject Parliament from discharging its legislative mandate. Further, the conclusion of this debate is not a divestiture in itself. Once we give authority, those who want to stop it can do it out there. So, this matter is properly before the House and I call upon the mover to reply,” stated Wetangula. 

Leader of the Majority party Kimani Ichungwah took cue from the Speaker, absolving the House from any wrongdoing, simultaneously urging members to adopt the report by the joint committee. 

The Court had the choice to injunction this House if they had those powers, but the Court chose not to. secondly, Mp Caroli Omondi has confirmed that he participated in the debate of the motion. He should have raised this matters before debate and actually excuse himself from debate,” said Ichung’wah.