• EACC said the Communication Authority (CA) never approved the takeover of Telkom Kenya Limited since part of its conditions were not met by the company.
• It said the AG's Office never issued its legal opinion and neither was the AG’s advice or comments incorporated into the contractual documents of the takeover.
Image: FILE
The Ethics and Anti-Corruption Commission has recommended to the Director of Public Prosecution to press charges against a former Treasury CS, a former Treasury PS and senior Telkom Kenya officials over the controversial nationalisation of the company.
The buyout deal was entered four days before the August 9, 2022, elections.
The government bought 60 per cent of the ordinary shares of Telkom Kenya held by UK-based Helios Investors LLP and its Mauritius-based subsidiary, Jamhuri Holdings Limited, for Sh6.09 billion.
In its quarterly report covering the period between July 1 and September 30, published in the Kenya Gazette, the EACC said investigations found that the Communication Authority (CA) never approved the takeover of Telkom Kenya Limited since part of its conditions were not met by the company.
The probe followed a complaint from the Clerk of the National Assembly vide a letter dated March 6, 2023.
The EACC report shows that the Office of the Attorney General never issued its legal opinion and neither was the AG’s advice or comments incorporated into the contractual documents of the takeover.
“Investigations also revealed that the acquisition of shares by the Government of Kenya from Jamhuri Holdings Limited did not meet the threshold as provided in Regulations 40 (3) and 4 (a) of the Public Finance Management (National Government) Regulations 2015 since the transaction was not unforeseen and unavoidable,” EACC said.
Controller of Budget Margaret Nyakang’o told Parliament’s Budget and Appropriations Committee (BAC) on February 14 that she refused to authorise the withdrawal of Sh6,091,140,702 to cater for the exit of Helios Investment in Telkom Kenya Ltd.
"And this was in writing,” Nyakang'o told MPs.
As such, the Commission said a recommendation was made on August 29 for the DPP to initiate charges against the Treasury CS in charge during that time, the former Treasury PS, Controller of Budget and former Director General, Public Investments and Portfolio Management.
Also recommended for prosecution are Telkom Kenya Ltd CEO, board chair of Telkom Kenya Ltd, Chief Operating officer, Chief Strategy and Business Development Officer and Chief Finance Officer.
EACC also wants a transaction officer for Helios Investors LLP charged.
The commission preferred ten counts against the individuals including conspiracy to commit an offence of economic crime.
The DPP has also been asked to approve 15 counts of abuse of office and two alternative counts of willful failure to comply with the law relating to the management of funds.
Other charges include conflict of interest, neglect of official duty, fraudulent acquisition, money laundering, and acquisition of proceeds of crime, deceiving principal and willful failure to comply with laws relating to procurement.
While speaking in Murang’a on Friday, EACC Chief Executive Officer Twalib Mbarak said the quarterly report contains other big cases for which they have made recommendations to the DPP for prosecution but declined to name individuals indicted in the Telkom deal.
“We have also investigated some cases that we are yet to get confirmation from the DPP in concurrence as far as Telkom sale is concerned; we have recommended a former CS, a former PS and some senior Telkom officials to be charged. I would not like to go into names,” he said.
On October 3, 2023, the Cabinet rescinded the controversial nationalisation of Telkom Kenya and directed the seller to refund the money.
The resolution was reached on Tuesday at a Cabinet meeting chaired by President William Ruto.
In a press release on October 4, the current Treasury Cabinet Secretary Njuguna Ndung’u said the Infrastructure Corporation of Africa LLC (ICA) of the United Arab Emirates had been arrived at as the new investor to acquire the 60 per cent shareholding of Telkom Kenya Limited after a competitive process initiated in January 2023.
This, he said, was “based on the offer they have put forward and subject to regulatory approvals”.
“In order to complete the process of onboarding ICA, the Government of Kenya will work with Jamhuri/Helios to transfer their 60 per cent shareholding directly to ICA. This process will inevitably require rescinding of the transaction documents already signed between GoK and Jamhuri/Helios, among other necessary actions.”
In the deal, Ndungu’u said, ICA would inject capital to fund Telkom Kenya Limited's infrastructure and the overall upgrade of the company’s capabilities and settle some of the outstanding liabilities of the company.
“On its part, and as part of the shared vision for Telkom, the government through the National Treasury will meet its part of the obligations as a minority shareholder and as a key consumer of services offered by the company,” the CS said.
He said the government would thereafter actualize the necessary regulatory reforms to correct structural imbalances in the telecommunication industry for the benefit of all stakeholders including the public as the consumer.
Image: ALICE WAITHERA