NAIROBI, Kenya – The High Court has declared the government’s sale of a 15 per cent stake in Safaricom to Vodacom unconstitutional, null and void, ordering the shares to be returned to the State.
A three-judge bench comprising Justices Francis Gikonyo, Roseline Aburili and Tabitha Wanyama delivered the ruling on Tuesday, September 15, 2026, bringing fresh uncertainty to a transaction worth Sh204.3 billion.
The judges found that the government breached constitutional and legal requirements when it proceeded with the partial divestiture of its holding in Safaricom, Kenya’s largest and most strategically important companies.
The court ordered the 15 per cent stake transferred to Vodacom to be restored to the Government of Kenya, which holds the shares on behalf of the people.
The ruling overturns the completion of the transaction on June 30, 2026, when Vodacom announced that it had acquired an additional 20 per cent effective interest in Safaricom, including the 15 per cent stake previously held by the Kenyan government and a further five per cent effective interest from Vodafone Group. The transaction increased Vodacom’s holding to approximately 55 per cent.
The judges determined that the decision to dispose of the government’s Safaricom shares constituted a public policy decision and therefore required meaningful public participation. The Constitution requires State organs and public officers to observe national values and principles of governance, including participation of the people in policy-making.
The bench found that the process did not meet the required standard of meaningful qualitative and quantitative public participation. The court’s finding is significant because the government had argued that the divestiture had passed through the necessary institutional processes.
Parliament did in fact conduct public hearings on the proposed transaction, with its committees travelling to 30 counties to collect views from members of the public.
However, the High Court ultimately found that the participation process did not satisfy the constitutional threshold required for such a major public asset transaction.
The judges also criticised the manner in which information about the transaction was disclosed. The court identified what it described as “unexplained obscurity” surrounding important aspects of the deal and found that material information had not been adequately disclosed.
The judges held that citizens could not meaningfully participate in the decision without access to sufficient information about the transaction. For the court, public participation could not amount to a box-ticking exercise. Citizens had to receive adequate information to understand the transaction and express informed views about the disposal of the public asset.
The bench subsequently found that the divestiture had been undertaken in violation of the Constitution and the law. The court therefore quashed the agreements, approvals and arrangements connected to the transaction and declared the sale “invalid, null, and void.”
The decision effectively reverses the transfer of the government’s 15 per cent holding to Vodacom. The State had originally held 35 per cent of Safaricom. Under the transaction, it sold 15 percentage points of that stake and retained 20 per cent.
Vodacom, which already held approximately 39.9 per cent of Safaricom through its existing interest, increased its holding to about 55 per cent following the transaction.
The government agreed to sell 6,009,406,980 Safaricom shares at Sh34 per share, giving the stake a transaction value of approximately Sh204.3 billion.
The wider financial arrangement also included an upfront payment of Sh40.2 billion linked to the government’s future dividend rights on its remaining 20 per cent holding. Parliament’s records put the combined immediate value of the share sale and the upfront dividend arrangement at roughly Sh244.2 billion.
The government had presented the divestiture as part of its strategy to raise non-tax revenue, create fiscal space and finance national development projects.
The National Treasury had said the transaction would generate about Sh244.5 billion in gross proceeds, with the funds intended to support the National Infrastructure Fund and Sovereign Wealth Fund.
The latest decision follows a lengthy legal battle that had already temporarily halted the transaction. In March 2026, the High Court issued conservatory orders preventing the government from completing the sale while petitioners challenged the transaction. The case raised questions about public participation, transparency, valuation and the disposal of a strategic State asset.
The Court of Appeal later lifted the conservatory orders in June, allowing the government to proceed with the transaction while the wider constitutional challenge remained before the High Court.
Vodacom subsequently announced on June 30 that it had completed the acquisition after the Court of Appeal’s decision and fulfilment of the remaining conditions.
The ruling creates a complicated financial and corporate process because the transaction has already been completed and Vodacom has exercised control over Safaricom as majority shareholder.
The practical process of unwinding the transaction, including the treatment of the money already paid and any related corporate arrangements, could therefore become the next major point of contention.
