Transaction Under Renewed Scrutiny

NAIROBI – The controversial 2022 government buyback of Telkom Kenya has dramatically resurfaced, with Members of Parliament now demanding a special audit into the KSh 6.1 billion transaction. During a tense session on Tuesday, November 18, 2025, the National Assembly's Public Accounts Committee (PAC) grilled National Treasury officials over the deal's legality and the slow pace of investigations by state agencies.

The acquisition of a 60 percent stake from UK-based private equity firm Helios Investment Partners, executed just days before the August 9, 2022, General Election, made the telecommunications firm fully state-owned. However, the transaction was conducted without parliamentary approval, a move lawmakers and the Auditor-General have repeatedly flagged as a violation of Article 223 of the Constitution, which governs emergency expenditure.

A History of Contentious Deals

Telkom Kenya's ownership has been a contentious issue for over fifteen years. The privatization journey began in 2007 when a consortium led by France Telecom (now Orange S.A.) acquired a 51% stake for USD 390 million, with the Kenyan government retaining the rest. This was part of a broader strategy to make the state-owned enterprise more efficient and profitable. Over the years, the government's shareholding fluctuated, at one point dropping to 30% after it failed to inject KSh 2.4 billion in a 2012 recapitalization, a matter that triggered an investigation by the Ethics and Anti-Corruption Commission (EACC) which was later terminated.

In 2016, Helios Investment Partners acquired a 60% stake from Orange, with the government's share increasing to 40%. Helios's exit in 2022 was reportedly prompted by the collapse of a proposed merger between Telkom and Airtel Kenya, a deal that would have created a more formidable competitor to market leader Safaricom. The government then exercised its pre-emptive rights to buy back the shares, a decision former Treasury officials defended as necessary to protect a vital national security asset.

Irregularities and Unanswered Questions

The 2022 buyback is mired in controversy. Controller of Budget Margaret Nyakang'o informed Parliament in February 2023 that she had initially refused to authorize the KSh 6.09 billion payment but was overruled by the Treasury. Investigations have since revealed significant procedural lapses. A joint parliamentary committee report in 2023 rejected the transaction, declaring it irregular. Furthermore, the EACC found that the Communications Authority of Kenya (CA) had not approved the takeover as Telkom had failed to meet certain conditions. The probe also established that the Attorney General's office never issued a formal legal opinion on the deal.

Auditor-General Nancy Gathungu's latest report highlighted that her office was denied access to transaction records for the Telkom share purchase. PAC members expressed frustration that despite these glaring irregularities, accountability has been elusive. “You are the PS, but cannot account for the billions irregularly used in the buyback. So, what happens next?” Funyula MP Dr. Wilberforce Oundo challenged the Treasury Principal Secretary, Dr. Chris Kiptoo, during the Tuesday meeting.

Implications for the Kenyan Taxpayer and Telecom Sector

The financial implications for Kenya are substantial. The KSh 6.1 billion used for the buyback was unbudgeted expenditure. In October 2023, President William Ruto's cabinet rescinded the nationalization deal and directed Helios to refund the money, aiming to restart the process of finding a new strategic investor for the financially struggling Telkom. However, the status of this refund and the search for a new partner remains unclear.

Telkom Kenya is a critical player in the country's infrastructure, providing essential communication services to key government and security agencies. Its instability and financial woes, including significant debts to regulatory bodies, pose a risk to national security and the broader telecommunications market. The renewed push by Parliament for a special audit aims to unravel the complexities of the deal, enforce accountability for the use of public funds, and pave a clear, transparent path forward for the troubled telco. The outcome will be closely watched by the Kenyan public, potential investors, and the East African region's technology and finance sectors.