NAIROBI, Kenya – The Kenyan government has told the Court of Appeal that the Sh204.3 billion it received from the sale of its 15 per cent stake in Safaricom cannot simply be refunded, as it challenges the High Court decision that nullified the transaction.
Attorney General Dorcas Oduor and National Treasury Cabinet Secretary John Mbadi made the argument in separate sworn affidavits dated September 17, 2026, filed as part of the State’s appeal against the September 15 judgment.
The government is seeking a stay of the High Court orders while the appeal is heard, arguing that reversing a transaction already completed on the Nairobi Securities Exchange would create significant financial and market complications.
The dispute follows the High Court’s decision to declare the sale unconstitutional, null and void and order the 15 per cent Safaricom stake returned to the Government of Kenya.
The three-judge bench of Justices Francis Gikonyo, Roselyne Aburili and Tabitha Ouya Wanyama found that the transaction failed to meet constitutional and legal requirements, including meaningful public participation and transparency.
The State’s latest argument centres on what happens to the money after the shares are returned.
The government says the High Court ordered restoration of the shares but did not issue a corresponding order requiring the State to refund Vodafone Kenya the Sh204.3 billion purchase price.
The State argues that restoring the shares without addressing the consideration paid would leave the transaction financially unresolved.
The government told the appellate court that:
“Restoring the government’s six million ordinary shares in Safaricom, which have already been transferred to Vodafone Kenya Limited, would happen without a corresponding order for the refund of the consideration paid.”
The shares were transferred to Vodafone Kenya through a block trade on the NSE on June 30, after the Court of Appeal lifted an earlier conservatory order preventing the transaction from proceeding.
The State now wants the Court of Appeal to suspend the High Court judgment until it determines the substantive appeal.
The Sh204.3 billion represented the purchase price for 6,009,814,200 Safaricom shares, sold at Sh34 each.
The transaction also involved a separate Sh40.2 billion payment made upfront for future dividend rights relating to the government’s remaining 20 per cent stake in Safaricom. Together, the two payments amounted to approximately Sh244.5 billion.
The government says the money is no longer sitting in a Treasury account. According to its appeal, the proceeds were directed to the National Infrastructure Fund after approval of the transaction.
The government’s position has created a significant legal tension because the same Court of Appeal previously considered the possibility of reversing the Safaricom transaction.
On June 26, the appellate court lifted the conservatory order that had blocked the sale. In doing so, the judges rejected arguments that transferring the shares would make a later reversal impossible.
The court stated:
“The shares of Safaricom PLC will remain capable of being restored to the relevant party with appropriate refunds being made, should those be the order that may ultimately issue.”
Four days later, on June 30, Vodafone Kenya completed the acquisition of the government’s 15 per cent stake.
The transaction increased Vodacom’s effective ownership of Safaricom to 55 per cent, after it also acquired an additional five per cent interest from Vodafone International Holdings.
The High Court later relied on the June Court of Appeal position when it ordered restoration of the government shares.
The State is now asking the appellate court to consider the practical consequences of that restoration order, including the fact that the proceeds have already been committed.
The government has also raised concerns about the mechanics of reversing the transaction.
Safaricom is a listed company and its shares are held electronically through the Central Depository and Settlement Corporation (CDSC).
The State argues that steps taken to implement the High Court judgment could become “difficult or impossible to reverse” once carried out.
The government says the case also raises:
“questions of grave public interest touching on fiscal planning, the stability of the capital markets, investor confidence and the country’s external position.”
Attorney General Oduor has separately warned that failure to suspend the High Court orders could “render its intended appeal nugatory”, meaning the government could succeed on appeal after irreversible steps had already been taken.
The High Court’s September 15 judgment found that the government had not conducted meaningful public participation before completing the divestiture.
The court said:
“Based on our analysis, findings and holdings in respect of the various issues identified for determination, we are satisfied that the petitioners have proved on a balance of probabilities that the divestiture in question was undertaken and procured in contravention of the Constitution and the law.”
The judges consequently declared the transaction “invalid, null and void” and ordered the 15 per cent stake restored to government ownership.
The court specifically ruled:
“A declaration is hereby made that the 15 per cent shares subject of the partial divestiture having been transferred in contravention of the Constitution and the law are hereby restored to the ownership of the Government of Kenya on behalf of the people of Kenya.”
The government has maintained that it followed the law when selling the stake.
Mbadi said after the High Court ruling that Treasury disagreed with the findings and would challenge them before the appellate court.
He stated: “We do not accept that the safeguards built into this transaction, including the protections extended to Safaricom’s employees, dealers and business partners, amounted to the constitutional and procedural failures as the court has asserted, and we intend to make that case fully on appeal.”
He added: “The National Treasury will pursue this appeal vigorously and provide further updates as the matter progresses through the courts.”
Vodacom has separately indicated that it will appeal the High Court judgment and seek a stay.
