The government will vigorously challenge the High Court ruling that nullified the sale of its 15 per cent stake in Safaricom Plc, National Treasury Cabinet Secretary (CS), John Mbadi, has announced.
Mbadi said the Treasury is analysing the full judgment and will pursue appropriate legal channels to overturn the decision, which declared the transaction invalid and ordered the shares restored to the State on behalf of the people of Kenya.
Speaking in Kisumu, Wednesday, the CS maintained that the divestiture was lawful and was undertaken as part of prudent management of public finances.
“The National Treasury remains confident that the process followed the law and was in line with prudent financial management, coherent with the nation’s fiscal realities,” Mbadi said.
The Three-Judge Bench that delivered the verdict, Tuesday, found that material information on the transaction had not been adequately disclosed to the public, Cabinet, and Parliament.
The Court also faulted the process on grounds of public participation, valuation, and national security.
The CS dismissed the court’s findings, saying the transaction had been conceived as a considered fiscal measure and subjected to both Cabinet and parliamentary scrutiny.
“The divestiture was conceived, developed, and presented to the 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,” he said.
According to Mbadi, the deal was intended to unlock resources for national development and infrastructure while allowing the government to retain a 20 per cent minority stake, down from 35 per cent.
He further disagreed with the court’s characterisation that safeguards for Safaricom’s employees, dealers, and business partners were inadequate.
“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,” he said.
Mbadi defended the government’s approach as consistent with its constitutional mandate to pursue development while exercising fiscal prudence.
“The right to development was balanced alongside every other obligation the Constitution places on the State, not set against it,” he said.
He said the Treasury will make its case through the appellate process.
“The National Treasury will pursue this appeal vigorously and provide further updates as the matter progresses through the courts,” he said.
The government had argued that the state should focus on creating an enabling environment for business rather than holding large stakes in commercial enterprises.
The High Court ruling has now halted the transaction pending appeal.
By Faith Lumumba
