Kenya's government and South Africa-based Vodacom are preparing appeals after the High Court in Nairobi declared the state's completed sale of a 15% Safaricom stake unconstitutional and ordered the shares restored to the government. The judgment was delivered on Tuesday, 15 September 2026; Finance Minister John Mbadi confirmed the government's appeal on Wednesday, while Vodacom said it would also seek a stay pending the Court of Appeal's decision.
The disputed block comprised about 6.01 billion shares sold by the Kenyan government for KSh204.3 billion, roughly $1.6 billion at the transaction's announced value. The transfer, completed on 30 June, reduced the state's direct Safaricom holding from 35% to 20%. Together with a separate effective 5% acquisition from Vodafone, it lifted Vodacom's effective interest to about 55% and gave the group a controlling position.
What the High Court found
A three-judge bench found that the divestiture process did not provide reasonable, meaningful public participation and that important information and transaction documents were withheld or misrepresented. The court treated the move from a minority position to effective control as more than an ordinary sale of a small block of listed shares and said the approvals and process failed constitutional and statutory requirements.
The judgment also questioned the selection of Vodacom without a competitive process, the regulatory treatment of what the judges considered a takeover, and the sale of rights to future dividends from the government's remaining stake. It raised national-security and data-governance concerns because Safaricom operates M-Pesa and communications infrastructure used throughout public and private life. Those are findings of the High Court; the appellants dispute the conclusion and are entitled to challenge it.
The court ordered the 15% block restored to state ownership. That remedy follows an earlier Court of Appeal decision which allowed the transaction to close while preserving the possibility that shares could later be returned if the constitutional case succeeded. The September judgment is therefore a substantive decision, not the earlier temporary order that surrounded the deal before completion.
The appeal changes the next step—not the judgment
An announced appeal does not automatically erase a lower-court judgment. Vodacom's 15 September market notice says it will lodge an appeal and apply for a stay. Mbadi said the Treasury believes the transaction complied with the law and that it will make that case vigorously. The next practical milestone is whether the Court of Appeal grants a stay while it hears the challenge; no reviewed source reported a final appellate ruling.
Safaricom said it was studying the judgment and its implications. The legal dispute is about ownership, public finance, approvals and control; it is not evidence that M-Pesa, mobile calls or other customer services have stopped. Customers and investors should distinguish the court-ordered reversal from the operational continuity of the listed company unless Safaricom or a regulator announces a specific service change.
Why Safaricom's ownership matters
The case matters because Safaricom is East Africa's largest telecommunications group and M-Pesa is embedded in everyday payments. It also tests President William Ruto's strategy of converting state assets into funds for infrastructure and fiscal relief. Kenya's debt repayments absorb about 40% of government revenue, according to Reuters, making the proceeds politically and financially significant.
Several outcomes remain possible: a stay could temporarily preserve the post-sale structure, the appeal could uphold or overturn parts of the judgment, or the parties could face a reversal and associated repayment obligations. Until the appellate court rules, neither the original sale nor the High Court remedy should be described as finally settled. Any stay order, appeal judgment or official implementation notice will materially change the position.
