Kenya yet to take over Telkom despite Sh6.1bn payout

In a letter to Telkom Kenya chairperson Eddy Njoroge by the previous National Treasury Cabinet Secretary, Ukur Yatani seen by the Star, Kenya was to pay a total of Sh7.5 billion to Helio's subsidiary, Jamhuri Holdings Limited  (JHL) to transfer all rights to Kenya.

According to the letter dated August 19, 2022, Yatani notified Njoroge of JHL's outstanding loan of $51.2 million (Sh6.1 billion) to Telkom Kenya and 71.2 million shares each at Sh20 with a total value of Sh1.42 billion. 

"JHL has agreed to transfer by Deed of Novation all rights and obligations relating to the outstanding loan advanced to Telkom Kenya and obligations to shareholder's loan that JHL took over from Orange East Africa, SA,'' the letter reads in part. 

The firm had loaned Telkom Kenya a principal amount of $47.7 million (Sh5.7 billion) which attracted an interest of $3.46 million (Sh411 million), bringing the total credit to $51.2 million (Sh6.08 billion).

The shilling traded at an average of 118.80 against the US dollar in August 2022. 

Furthermore, Kenya was to pay JHL for 71.2 million ordinary shares each valued at Sh20, totalling Sh1.42 billion. 

Even so, Kenya paid Sh6.09 billion for the 60 per cent stake held by the UK-based private equity fund in a record 26-minute transaction. 

This means, close to Sh1.4 billion is yet to be paid to the Mauritius-domiciled entity for it to fully hand over Telkom Kenya to the government of Kenya. 

Our effort to reach Telkom Kenya for clarification on the ownership and transfer of novations did not bear fruits as both the board and the executive had not responded to our inquiries by the time of going to the press.

We had sought to establish from Telkom Kenya's managing director Mugo Kibati the ownership of the firm he leads. Both our calls and text messages went unanswered. 

In 2015, Helios took a majority stake in the telco after buying off shares owned by France’s Orange. The French firm bought Telkom Kenya shares when it was privatised in 2007. 

Late last month, National Assembly's Finance and Planning Committee heard that the ownership of Telkom Kenya had not been transferred to the state despite the exchequer releasing Sh6.9 billion.

The Kuria Kimani led committee suspects that the amount was a settlement for the outstanding shareholder loans.

The committee is probing the deal to establish if the law was followed in the withdrawal of the money under Article 223 of the Constitution.

The committee has also petitioned the Parliament to reject the transaction.

It holds that Article 223 of the Constitution was blatantly abused in the withdrawal of Sh6.142 billion to pay a private person.

“If the House rejects that withdrawal (Sh6.142 billion), all officers who made the transaction will be held to account and made to repay the money from their pockets,'' Kimani told journalists. 

In the probe that commenced yesterday, the Parliament will be seeking to get information on when JHL was incorporated in Kenya and its shareholding.

The committee will also seek to establish the regulatory and statutory approval granted by the Communication Authority of Kenya (CA) and Capital Markets Authority (CMA) for the acquisition of Telkom shares by Jamhuri Holding Limited.

Early this month, Controller of Budget Margaret Nyakang’o shocked the nation after exposing Whatsapp chats illustrating how Yatani pressured her to clear Sh15 billion, some of which was used to buy off Telkom Kenya. 

The Controller of Budget revealed how Yatani allegedly invoked the President’s name numerous times to press her to approve the payments.

"These included Sh6 billion to cater for the exit of Helios Investment Partners in Telkom Kenya and another Sh9.2 billion from the annuity fund to finance some road projects,'' Nyakang’o told the National Assembly Public Petitions Committee. 

Yatani has since dismissed Nyakang’o allegations, threatening to sue her for defamation.