WRONG COURSE?

EACC flags Telkom, Airtel merger, says matter under probe

The Senate ICT committee approved the merger

In Summary

• MPs took a swipe at the ICT CS following his sentiments that Telkom is a private company, hence not under the ministry.

• EACC tasked to explain if it was aware of the ongoing cannibalisation of Telkom assets following the confusion over the merger.

A Telkom shop in the central business district in Nairobi. /MONICAH MWANGI
A Telkom shop in the central business district in Nairobi. /MONICAH MWANGI

The anti-graft agency has dismissed assertions that it approved the Telkom and Airtel merger.

The matter, according to the Ethics and Anti-Corruption Commission, is still a subject of investigations.

The EACC says it has asked the Communications Authority of Kenya to halt the merger process pending the probe.

The agency has also issued advisories to responsible government entities –  the Ministry of ICT - to protect government interests.

“Investigations are ongoing and the preliminary findings are yet to unearth any corrupt practices,” the EACC legal services director David Too told a National Assembly committee chaired by Narok North MP Moitalel ole Kenta yesterday.

The committee is following up on the status of recommendations by the Public Investment Committee which ordered that Treasury officials be investigated for suspect malpractices in the merger.

The Senate ICT committee had approved the merger, eliciting questions of the interests motivating the speedy disposal of the once-vibrant state telco.

When asked why it has taken over five years to complete the probe, the EACC official said the inquiry is expansive in nature and needs another three months to complete.

A team of EACC plans to visit the Cayman Islands, Mauritius, the Netherlands, UAE, India, Sudan, France and South Africa where some of the players in the merger are based.

The agency seeks to unearth the owners of Jamhuri Holdings Ltd – a key player in the merger. It is incorporated in Mauritius and is owned by Helios Investment Partners (Helios) – a company incorporated in the Cayman Islands.

During the probe by MPs, it also emerged that the Attorney General advised against the merger and called for a comprehensive valuation of both Airtel and Telkom.

“On this note, the ICT ministry, Telkom and the National Treasury ought to be independently satisfied on the legal and financial soundness of the proposed transaction,” AG Kihara Kariuki said in his advisory to CSs Ukur Yatani and Joe Mucheru.

MPs were concerned that the ICT CS had said that Telkom is a private company, hence not under the ministry.

MPs questioned that position, saying it cannot be the case as the government has 40 per cent shareholding in the telco.

They also queried EACC over its two communications that gave contrasting positions on the merger – one ordering a stop, and another purporting to allow the same to continue.

On August 14, the commission, in a letter signed by CEO Twalib Mbarak, said that due to public interest, the merger should be halted pending ongoing investigations.

But in an October 15 letter, the CEO advised the Treasury and ICT ministry to ensure adherence and compliance with the legal advisory issued by the AG.

Twalib also asked the Competition Authority to ensure the interests of Telkom employees are protected and for the concerned entities to ensure the state assets in the telecoms sector are safe.

“The commission, therefore, recommends that the issues be considered in the approval process of the proposed merger,” the letter reads.

MPs, among them Nyando’s Jared Okello, argued that this could be interpreted to mean that the EACC had given the go-ahead for the merger.

“The EACC has without provocation or reference to its letter on August 14 approved the merger in its latest letter,” the MP said.

Other lawmakers asked the EACC to explain if it was aware of the ongoing cannibalisation of Telkom assets following the confusion over the merger.

Kenta said they will follow up the matter with a view to recommending the prosecution of culpable officials who took part in the merger.