The Telkom Kenya Deal: Who owns the company after the Government’s Sh6 billion purchase?

The Telkom Kenya ownership saga has returned to Parliament, with fresh questions over a Sh6.091 billion government purchase that was supposed to give the State full control of the telecommunications company.

The money was paid to Jamhuri Holdings Limited, the investment vehicle through which Helios Investment Partners held its stake in Telkom Kenya.

The government already owned 40% of the company and agreed in 2022 to acquire Jamhuri’s 60% stake, effectively taking Telkom into full State ownership.

But the transaction did not end there.

The Sh6 billion deal

Helios had decided to exit Telkom Kenya, triggering an agreement with the government for the sale of its 60% holding.

The Treasury paid Sh6.091 billion in August 2022.

At the time, the transaction was presented as a complete acquisition and was reported as returning Telkom Kenya to 100% State ownership.

The purchase, however, subsequently attracted scrutiny over the manner in which the money was withdrawn and the regulatory and parliamentary approvals surrounding the transaction.

The Auditor-General and parliamentary committees questioned the use of public funds under Article 223 of the Constitution, which permits government expenditure outside the approved budget in specified circumstances but requires subsequent parliamentary approval.

Parliament's Finance Committee later recommended disapproval of the expenditure.

The Ethics and Anti-Corruption Commission also investigated allegations surrounding the acquisition, including the approvals for the purchase of the shares.

Government changes course

In October 2023, President William Ruto's Cabinet rescinded the decision for the government to purchase the 60% stake from Jamhuri/Helios.

Treasury said the original transaction had not been carried through to completion and announced plans to have the 60% stake transferred directly to another strategic investor, Infrastructure Corporation of Africa (ICA) of the United Arab Emirates, subject to regulatory approvals.

That decision created the central question now before Parliament:

What happened to the shares after Kenya had already paid for them?

Who owns Telkom Kenya now?

According to evidence reported from the latest parliamentary inquiry, the government currently holds 37.9% of Telkom Kenya, while Jamhuri Holdings retains 56%.

That is dramatically different from the 100% State ownership that followed the announcement of the 2022 buyout.

The Solicitor General has reportedly confirmed that the government did not acquire full ownership and that authorities did not know the ultimate owners of Jamhuri Holdings, which is registered offshore.

The parliamentary investigation is examining the circumstances behind the ownership position.

The figures also explain why the Sh6 billion payment remains contentious.

The issue is not simply how much Kenya paid, but whether the State received the ownership it intended to purchase.

There is another layer: the 2022 transaction involved not only shares but shareholder indebtedness owed to Jamhuri.

Contemporary reporting indicated that the government was taking over that indebtedness as part of the arrangement.

So, what happens next?

The current parliamentary inquiry is expected to establish the legal and financial status of the transaction, including the ownership of Telkom Kenya and the circumstances surrounding the government payment.

Until that process is concluded, the safest description is not that Kenya simply “bought Telkom Kenya and lost it”.

It is that Kenya paid Sh6.091 billion in 2022 for a 60% stake it intended to acquire, but the subsequent transaction was rescinded and the latest parliamentary evidence indicates that Jamhuri Holdings still holds a majority stake.

That unresolved gap - between the money paid, the shares intended to be acquired and the ownership recorded today - is now at the heart of the Telkom Kenya probe.