The lawmakers are also perturbed by the shareholding status at the telco company.
Appearing before the National Assembly’s Public Investment Committee on Social Services, Administration and Agriculture, CA director general David Mugonyi highlighted the authority’s efforts in recovering the debt.
He told MPs the National Treasury undertook to provide Telkom Kenya Limited with funds required to cover frequency spectrum fees for Financial Years 2019-20 and 2020-21, and urged the CA to allow Telkom to continue utilising it.
“National Treasury’s letter dated October 22, 2021 committed to make available to Telkom Kenya Limited the amount of money required to cover the frequency spectrum fees for the two financial years amounting to Sh2.2 billion,” he told the committee chaired by Navakholo MP Emmanuel Wangwe.
“And it requested for CA’s forbearance to enable Telkom Kenya Limited to access the regulatory approvals it requires.”
Mugonyi said Telkom Kenya is aware of the debt, citing a letter dated January 11, 2022 addressed to the National Treasury and copied to the CA.
In the letter, Telkom Kenya requested expedited formalisation and settlement of the outstanding regulatory fees amounting to Sh3.1 billion.
“The actions by Telkom Kenya clearly recognised the authority’s claim and confirmed the outstanding regulatory fees, further noting that any enforcements action would adversely affect their operations,” Mugonyi explained.
The CA, he said, has been making efforts to recover the debt. On August 14, 2020, a formal request was made to the National Treasury for the release of the funds to safeguard the validity of licences held by Telkom Kenya Limited.
He further disclosed a trail of correspondences with Telkom, including demand letters to recover the debt.
“The authority, through a letter dated February 2, 2024, formally requested the National Treasury and the Attorney General to prioritise the settlement of outstanding debt during the transition process,” Mugonyi said.
“In response to the formal demand letter, Telkom Kenya Limited, in a letter dated January 11, 2022 wrote to National Treasury, copying the authority, requesting the expedited formalisation and settlement of the outstanding amount.
“In this correspondence, Telkom acknowledges the debt and noted any enforcement action could adversely impact their operations.”
Wangwe, however, emphasised on the need for transparency and institutional reforms in the CAK, saying Parliament will not stand misuse or mismanagement of public funds.
“If you are able to switch off live broadcast, why not switch off Telkom to recover the debt?” Wangwe asked.
Saboti MP Caleb Amisi, who doubles as vice chairperson of the committee, urged the authority to move with speed and recover the debt.
“An institution at the centre of security must be beyond reproach. This is something we need to solve. We cannot carry this forward in audit books,” he said.
The committee also sought to know the shareholding status for Telkom Kenya.
Mugonyi submitted that the National Treasury holds 37.9 per cent stake, another 56.8 per cent by Jubilee holdings and 5.2 per cent by Adili Trustees, as at March 2024.
“CA was not involved in the transactions at all. We regulate Telkom, not the entities behind it,” he said.
“We also know Telkom, not the entities behind it, other than National Treasury.”
