High Court nullification of Vodacom’s purchase of the Government’s 15 percent stake in Safaricom has attracted a lot of attention.

Government records show the transaction was intended to provide seed capital for the National Infrastructure Fund. Including Ksh 40.2 billion in upfront payments for future dividends, the total package was Ksh244 billion.

National Treasury Cabinet Secretary John Mbadi says the government will challenge the court decision, stressing the transaction had followed the law and had passed through Cabinet and parliamentary scrutiny.

“National Treasury will pursue this appeal vigorously,” Mbadi told a battery of journalists in Kisumu.

He seemed to be (more) confident noting that the divestiture was conceived, developed and presented to Cabinet and the National Assembly as, “a considered fiscal measure, structured to unlock value for the Exchequer while safeguarding the strategic character of an institution that touches the daily lives of over 50 million Kenyans.”

The transaction was completed on June 30, after the Court of Appeal lifted conservatory orders that was blocking the completion of the partial sale of shares.

Safaricom says necessary conditions precedent were eventually fulfilled, but our courts are clearly saying the shares be restored to State ownership.

“Safaricom is reviewing the judgement and it’s implications. Given that the matter remains subject to legal processes, further updates will be provided in due course and as appropriate,” Linda Mesa Wambani said in a statement issued this morning.

When the matter came before a three-judge bench, yesterday (September 14), it was ruled that the decision to sell the government’s stake was a public policy decision that required meaningful public participation before it could be undertaken.

With the mandate given by the constitution, the judges said, neither the Cabinet nor the National Assembly subjected the proposed sale to adequate public participation, rendering the process unconstitutional.

The decision means the shares will be reversed and 15 percent returned to government.

Not surprisingly, South African telecoms company Vodacom has also contested the court ruling that led to the cancelation of the deal, now planning to appeal. How will it pun out to shareholders? The jury is out.