Kenya’s High Court has nullified the Government’s sale of a 15 per cent stake in Safaricom to South Africa’s Vodacom, ordering that the shares be restored to the State.
The three-judge bench ruled on Tuesday, September 15, 2026, that the transaction breached constitutional and legal requirements, particularly those relating to public participation, transparency and disclosure of material information.
The decision throws the future of one of Kenya’s largest corporate transactions into fresh uncertainty, less than three months after the deal was completed.
Sh204.3 billion transaction
The Government had agreed to sell 15 per cent of its 35 per cent stake in Safaricom to Vodacom at Sh34 per share, generating approximately Sh204.3 billion from the sale.
The transaction involved about 6.01 billion Safaricom shares. The Government retained a 20 per cent direct stake, while other investors continued to hold shares through the Nairobi Securities Exchange.
A separate arrangement also saw the Government receive about Sh40.2 billion upfront against future dividends from its remaining 20 per cent holding, bringing the total value of proceeds associated with the transaction to about Sh244.5 billion.
The Government had argued that the transaction would unlock value from an existing State asset and provide funding for infrastructure investment.
Why the transaction went to court
The sale faced legal challenges from petitioners who questioned the constitutionality and transparency of the divestiture.
The Government maintained that the transaction had followed the relevant legal processes and received parliamentary approval after public hearings.
The High Court, however, found that the public participation process was not sufficiently informed or meaningful.
The judges particularly faulted the Government for failing to provide adequate information about material aspects of the transaction, including the identity and structure of the proposed buyer and the implications of the deal.
The court also found that important transaction documents had not been made available during the public participation process.
Court says transaction effectively gave Vodacom control
A major issue in the judgment was the wider ownership structure surrounding Safaricom.
Vodacom already held an interest in Safaricom through Vodafone Kenya. Its acquisition of Vodafone’s remaining interest, combined with the Government’s 15 per cent stake sale, increased Vodacom’s effective ownership of Safaricom to approximately 55 per cent.
The High Court therefore characterised the transaction as more than a straightforward partial disposal of State shares, describing it as a “camouflage merger or acquisition and takeover” in its judgment.
The judges also raised concerns over the strategic nature of Safaricom, including its role in mobile money, government services, communications infrastructure and systems associated with elections and personal data.
Deal had already been completed
The ruling comes after a lengthy legal battle.
The High Court had initially frozen the transaction in May. In June, however, the Court of Appeal lifted the orders blocking the sale, allowing the Government to proceed.
The transaction was subsequently completed on June 30, 2026.
This means the latest ruling does not simply stop a proposed transaction. It potentially requires the reversal of a transaction that has already been completed, with the shares transferred and the purchase consideration paid.
Government to appeal
Treasury Cabinet Secretary John Mbadi said on Wednesday that the Government would appeal the High Court decision.
The Government’s position is that the transaction was lawful and had received parliamentary approval following public participation hearings.
Vodacom has also indicated that it will challenge the ruling, setting the stage for another round of litigation over the ownership of the shares.
For now, the High Court has ordered that the 15 per cent stake be restored to the Government of Kenya on behalf of the public. The court also declined to suspend its judgment pending the appeal, directing the parties to pursue a substantive application for a stay.
What it means for Safaricom
The ruling does not affect Safaricom’s day-to-day operations, its mobile network or M-Pesa services.
The immediate issue is ownership and control.
Vodacom’s increased stake was intended to give it majority control and enable it to consolidate Safaricom within its group accounts. The High Court decision puts that arrangement in question while the Government and Vodacom prepare for the next stage of the legal battle.
The final outcome will depend on the appellate process and any orders issued on whether and how the completed transaction should be unwound.
For Kenya, the case also raises a broader question about how major public assets can be disposed of, the level of information that must be provided to citizens and Parliament, and the constitutional threshold for meaningful public participation in such transactions.
