Vodacom asks court to strike out its name from Safaricom share sale case

Vodacom Group has urged the court to strike its name out of a case filed by Kanu spokesperson Tony Gachoka and activist Fredrick Onyango in opposition to the sale of Safaricom shares.

The United Kingdom-based firm, in its reply to the case before High Court Judge Lawrence Mugambi, said that it is not a party to the government share sale deal.

Its lawyer Aisha Ahmed Abdallah said that another problem of being listed as a party to the case was the court’s powers to hear a case against a party domiciled in a foreign country.

“The seventh respondent is not a necessary and proper party to these proceedings and retaining it will not assist the Court and will lead to delay and increased costs. The contracting parties and relevant regulatory authorities are the necessary parties,” argued Aisha.

It stated that instead, the share sale was by Vodafone Kenya Limited.

This comes as the court set March 12 as date to determine whether the case should be merged with two other cases challenging the sale.

Gachoka, a Nairobi gubernatorial seat aspirant and Onyango’s lawyers Lempaa Suiyanka told the court that his clients wanted the case heard by more than one judge as it involved public law and was of great importance to the country.

Their other lawyers are Kalonzo Musyoka and Eugene Wamalwa.

On the other hand, National Treasury, Information, Communication and Digital Economy Cabinet Secretaries, the Communication Authority of Kenya (CA) and the Competition Authority of Kenya urged the court not to issue orders stopping the sale.

According to them, the two petitioners had not proved that there was a risk of the 15 per cent stake being sold or a conclusion of the same.

They asserted that there will be no loss of public funds or any assets.

“Critically, however, the Petition does not plead, nor does the application demonstrate, the existence of: a concluded sale agreement; cabinet approval; parliamentary approval; competition Authority approval; a binding transaction instrument or any irreversible legal step effectuating disposal,” their lawyer Christopher Marwa argued.

Marwa asserted that the case amounted to an abuse of court process, as it was allegedly being asked to supervise the Executive

“Application improperly invites the Honourable Court to pre-empt, supervise and micro-manage executive and regulatory processes that are on-going, consultative and yet to crystallise into a ripe or justiciable constitutional dispute,” he argued.

In the case, Gachoka and Ogola argued that it would be unfair to have the sale concluded without the court’s scrutiny of the same.

According to them, the money expected from the sale would allegedly be spent without Parliament’s approval or being channelled to the consolidated fund.

“The impugned transaction has been undertaken without public participation, without parliamentary approval, without independent valuation, and without compliance with the Public Procurement and Asset Disposal Act, the Privatisation Act, and Article 227 of the Constitution,” they claimed.

On the other hand, Safaricom told the court that it was not the right party to sue as it was not in control of the government’s shareholding decisions.

Its lawyer, Andrew Musangi, asserted that the telecommunication company is bound by disclosure, market-conduct, and governance obligations under Kenyan law.

He said that the case was based on speculation, adding that the claims were vague as the process had not been concluded.

He added that they have neither explained why they suggest that Kenyans should pay a premium on the open market value nor the methodology they have used to conclude the Safaricom PLC shares ought to be traded at Sh 70 to 80 per share.

“ The Petition is premature to the extent that there is no final, operative, or legally binding decision capable of enforcement or restraint by this Honourable Court. The various regulatory steps required to progress the proposed transaction to conclusion are all currently underway and have not been concluded. The Petitioners are effectively accusing parties of non-compliance while the compliance processes are ongoing,” he replied.

According to him, Safaricom is a publicly listed company on the Nairobi Securities Exchange (NSE), hence, it does not fall under the Public Procurement and Asset Disposal Act, 2015. Under section 4(1) of the Act.

He also said that all necessary disclosures have been made to Parliament and the relevant regulatory authorities and others through public announcements of the proposed transaction.

“ The Parliamentary process is well and publicly documented and ongoing,” the court heard.