In a rather unexpected judgment, Telkom Kenya and Airtel now have the green light to revive their planned merger. This is after the High Court rejected a letter by the anti-graft agency questioning the sale of Telkom’s properties.
Privatisation of Telkom
According to Business Daily, plans to privatise Telkom started in 2007. This is when the government disposed of 51 per cent of its shares to Orange E.A. Limited.
In 2012, the company recorded an unsatisfactory and impaired financial position and was faced with imminent insolvency. And to avert the situation, the two shareholders resolved to restructure the applicant’s balance sheet.
The exercise involved, among other things, writing off part of the company’s debt, injection of capital by the two shareholders and, adjustment of the government shares to 30 per cent and France telecom shares to 70 per cent on account of each shareholder’s contribution.
Telkom Airtel Merger Talks Restart
According to EACC, there were claims of misappropriation of the company’s assets before the planned merger. Why you ask? Well, the agency said with 40 per cent government stake in Telkom, EACC has the mandate to protect the public interest. Particularly in investigating corruption and economic crimes.
Thus, Telkom had moved to court seeking to reject this letter by EACC on February 26, last year. The letter sought a list of properties it had sold and suspended any more sales pending the conclusion of investigations.
High Court judge Jairus Ngaa says that the move by the Ethics and Anti-Corruption Commission (EACC) is illegal. This decision clears the way for the merger between Telkom and Airtel.
The EACC in a gazette notice last month said investigations established that the process of privatisation of Telkom Kenya was above board. Also, there was no evidence of impropriety or culpability of the public officials involved in the process.
It, however said it was awaiting a response from the Director of Public Prosecutions (DPP).