NAIROBI, Kenya, Sept 17 – The High Court has cited flawed public participation, national security concerns as well as breaches of public finance and equity principles among the reasons for nullifying the Kenyan Government’s sale of its 15 percent stake in Safaricom to South Africa’s Vodacom Group.

In the full judgment, Judges F. Gikonyo, R.E. Aburili and T.W. Ouya also found that the Government erred in appointing KCB Investment Bank as the transaction’s lead adviser and that there was misrepresentation and concealment of information surrounding the deal.

The judges found that the divestiture was concluded without reasonable, qualitative and meaningful public participation as required under Articles 10 and 118 of the Constitution.

The Milimani High Court also found that the transaction was wrongly treated as a simple share sale despite involving a merger, acquisition and takeover that resulted in a majority foreign controlling interest of 55 percent being transferred to a single entity.

They said the transaction was therefore subject to disclosure and compliance requirements under the Capital Markets Act and Competition Act.

The judges further found that transferring a majority stake in critical national infrastructure, including M-Pesa, to a foreign entity without a National Security Impact Assessment violated Article 238 of the Constitution.

“A Declaration is hereby made that the transaction advisors Ms KCB Investment Bank Limited, for the subject divestiture of the Government of Kenya’s 15% shares in Safaricom PLC were procured in contravention of Article 227 of the Constitution and the provisions of the Public Procurement and Assets Disposal Act,” the judgment reads.

The court also found that the divestiture violated constitutional principles on intergenerational and intragenerational equity and sustainable development under Articles 10 and 201.

“A Declaration is hereby made that the divestiture of the 15% of the Government of Kenya’s shares in Safaricom PLC violates the constitutional principles of intergenerational and intragenerational equity, and sustainable development provided under Articles 10 and 201 of the Constitution,” the judgment states.

The Government has said it will appeal the decision, arguing that it followed due process, including obtaining approval from Cabinet and Parliament, before selling the stake.

National Treasury CS John Mbadi said the Government was studying the full judgment and would use the appropriate legal channels to challenge the findings.

Vodacom has also announced that it will appeal the judgment at the Court of Appeal and seek orders temporarily suspending its implementation pending the appeal.

The sale, valued at about Sh204 billion, has faced several legal challenges.

High Court Judge Lawrence Mugambi temporarily halted the transaction in March 2026 following a petition by Fredrick Ogola and Tony Gachoka, who raised concerns over data sovereignty, public participation and other constitutional issues.

The Court of Appeal later overturned the High Court orders suspending the sale, allowing the transaction to proceed.

Mbadi had said proceeds from the sale would be used to provide seed capital for the proposed National Infrastructure Fund and Sovereign Wealth Fund.