Kenya's High Court just unwound a $1.58 billion Safaricom sale that closed three months ago

Kenya's High Court has voided one of the country's largest privatisation transactions in recent history, and done so after the deal had already closed, not before.

What actually happened, in the correct order

This is a story that only makes sense with the full timeline, since several of its individual facts read very differently in isolation than they do in sequence.

The government first proposed selling a 15% stake in Safaricom to Vodacom in December 2025, valued at roughly KES 204.3 billion, about KES 34 per share, plus a further KES 40 billion for the sale of future dividend rights on a separate, remaining 20% stake. Parliament approved the transaction under Session Paper No. 3 of 2025 on March 31, 2026, with the sale scheduled to take effect the following day. Before that could happen, the High Court issued conservatory orders in May 2026, freezing the transaction while a coalition of petitioners, led by activist Tony Gachoka, challenged its constitutionality. Kenya's Court of Appeal lifted that injunction on June 26, 2026, allowing the sale to proceed while the underlying constitutional case continued before the High Court. The transaction closed on June 30, 2026.

That closing is the detail that changes how everything since should be read. Vodafone Kenya's stake in Safaricom rose from about 39.9% to 55% following the deal, combining the purchased 15% government stake with an additional roughly 5% effective interest Vodacom separately acquired through Vodafone Kenya. The Kenyan government's direct shareholding fell from 35% to 20%. Safaricom's board subsequently added two Vodacom-linked executives, Mariam Cassim and Matimba Mbungela, reflecting the group's newly consolidated majority position.

The underlying constitutional case, however, never went away just because the transaction had closed. It proceeded to a full hearing, and on September 15, 2026, the same three-judge bench delivered its final judgment: the sale was unconstitutional, and the shares must be returned to the government.

What the court actually found

The judges' core finding was that what had been presented to Parliament and the public as a partial divestiture, selling 15% of a company the government still substantially controlled, was in reality a much larger restructuring that handed Vodacom effective control of Safaricom. The court explicitly rejected the "partial divestment" framing, ruling instead that the arrangement "amounted to a takeover."

Three specific findings supported that conclusion. First, the court found the government engaged in what the judgment called "unexplained obscurity" regarding the identity of the proposed buyer and concealed material information throughout the process, information that was not adequately disclosed to the public, the Cabinet, or Parliament. Second, the judges found the process lacked the meaningful public participation required under Articles 10 and 118 of Kenya's Constitution for a decision of this scale involving a major public asset. Third, the court found that transaction advisers, including KCB Investment Bank Limited, had been procured in violation of Article 227 of the Constitution and the Public Procurement and Asset Disposal Act, a separate procedural defect on top of the disclosure failures.

The bench also addressed, and rejected, Vodacom's argument that Parliament's subsequent approval of the transaction cured any earlier constitutional violations. The judges held that the petitions challenged the constitutional foundation of the transaction itself, and that later parliamentary approval could not retroactively fix defects in how the deal was structured and disclosed in the first place.

On the national security dimension, the court found the transaction raised genuine concerns given Safaricom's role operating critical infrastructure, including systems supporting elections, government payment programmes, and mobile money services processing a substantial share of Kenya's economic activity, concerns the government's own filings had not adequately addressed relative to the scale of control being transferred.

Why the shares can actually be returned

A reasonable question is whether a completed, closed transaction can simply be unwound by a later court ruling. The bench addressed this directly, relying on a 2026 Court of Appeal decision that had already established Safaricom shares remained capable of restoration even after transfer, subject to appropriate refunds where necessary. The court's order states plainly: "the 15 per cent shares subject of the partial divestiture having been transferred in contravention of the Constitution and the law are hereby restored to the ownership of the Government of Kenya on behalf of the people of Kenya." Practically, that means the government's stake is set to move back from 20% toward 35%, and Vodacom's effective ownership back down from around 55%, though the mechanics of refunds, timing, and any appeal remain to be worked out.

What this costs the Treasury, and what happens to the money already spent

For Kenya's National Treasury, this ruling is a significant fiscal setback layered on top of the legal one. The government had counted on the roughly KES 204 billion in proceeds to help fund infrastructure spending and manage debt obligations amid IMF-linked deficit reduction targets. The ruling reopens exactly the funding gap that transaction was meant to close, without the court's judgment specifying how or whether the government must return proceeds it may have already spent, a practical question likely to generate further litigation of its own in the coming months.

For Vodacom, the ruling undoes a consolidation it had already begun acting on, board seats, majority governance rights, and balance sheet treatment all built on a 55% position the court has now found was unconstitutionally acquired. Whether Vodacom appeals to Kenya's Court of Appeal or Supreme Court, and on what timeline, will determine how quickly, or whether, this ruling actually translates into shares physically moving back to government ownership.

The tecMAMBO take

The most important thing to get right about this story is the direction of the news. This is not a case of Kenyan courts protecting a strategic asset from being sold. It's a case of Kenyan courts reversing a sale after the fact, once a full hearing established that the process used to justify it had concealed the transaction's real scope from the public and Parliament that were supposed to approve it. That distinction matters for how seriously to take the precedent: a court willing to unwind an already-closed, multi-billion-shilling transaction months after completion sends a considerably stronger signal about constitutional constraints on privatisation than a court simply pausing a deal before it closes would have.

Whether that signal holds depends entirely on what happens next, an appeal, a negotiated settlement over the KES 204 billion the Treasury has already allocated elsewhere, or a genuinely unwound transaction with shares physically returned to state ownership. Any of those outcomes will shape how Kenya approaches the rest of its privatisation programme far more than the original sale ever would have.