NAIROBI, KENYA — The contested sale of Safaricom, East Africa’s most profitable company, will now proceed after the High Court in Nairobi ruled against a plaint filed earlier against its sale.
The suit was filed by Kenya’s main opposition party, the Orange Democratic Movement (ODM), on the pretext that the proposed sale was not transparent in the absence of a privatisation commission as provided by law.
Mobile service provider, Safaricom, which last year earned Ksh17 billion (US$25million) has been slated for sale before year end and preparations will now go on to dispose off 25% of its shares worth Ksh30 billion ($45 million).
The opposition argued that the government had a hidden motive in the hurry to dispose off its stake in the mobile operator as the resources were likely to be abused especially with a glaring election less than one hundred days ahead.
The government however argued that the sale was the necessary as it would fill part of the budget infrastructure development deficit of Ksh36 billion.
Finance minister, Mr. Amos Kimunya said the opposition demands were aimed at denying the public from owning part of the most profitable company in the region through unnecessary lawsuits.
The minister is however accused of refusing to gazzette a commission to over see the disposal of state resources after parliament passed the privatisation bill and the president gave assent to it.
While giving the ruling at the Nairobi high court last Wednesday, Justice Joseph Nyamu said the plaint lacked legal backing as the privatization law they were using to block the sale had not yet been gazetted.
“We cannot give judgment in reference to a law that does not exist in the first place,” said the Judge in his ruling.
Opposition MPs Anyang Nyong’o, Omingo Magara and Mwandawiro Mghanga through their lawyer Mr. James Orengo however promised to file an appeal blocking the sale as soon as possible.
Kimunya had earlier remained categorical that the much anticipated Safaricom Initial Public Offer (IPO) would go on despite the law suit and reports on impropriety over its ownership.
Just two months ago, a parliamentary committee filed a damning report over the ownership of the giant communications company after it emerged that 10% of the company’s stake had been acquired by a shadowy company called Mobitelea.
Kimunya said since the matter was a subject of parliament, the IPO would still go on unless it was decided otherwise by the august house after debate on the allegations of a parliamentary committee.
The success of the law suit would throw government’s expectations of fixing the Sh109 billion budgetary deficit through a chain of Initial Public Offers (IPO) key among them the Safaricom into jeopardy and result into a budget slump.
There is clearly public interest in investing in the firm, whose $25million profit announcement mid this year has propelled the company to high rating as the first to register such returns both locally and in Sub-Saharan Africa.
