The Vodacom Group plan to increase its ownership stake in Safaricom Plc beyond 50 percent has been temporarily halted after Kenya’s High Court issued orders suspending the controversial transaction pending the outcome of constitutional petitions challenging the deal.
A three-member judicial panel comprising Justices Francis Gikonyo, Roselyne Aburili and Tabitha Ouya ruled that the proposed acquisition raises major constitutional concerns relating to national security, public participation, data sovereignty and the management of public assets.
According to Brandspur Banking News Desk, the court directed that both Safaricom and Vodacom must maintain the existing ownership structure until the legal challenges are fully heard and determined, effectively delaying one of Kenya’s most significant telecommunications and privatisation transactions.
The judges stated that the disputed shares involve public assets held on behalf of Kenyan citizens and therefore cannot be treated as an ordinary private commercial transaction exempt from constitutional scrutiny. The court further maintained that concerns over investor confidence should not override constitutional obligations and judicial oversight.
The legal dispute emerged after the Kenyan government approved plans for Vodacom to acquire an additional 15 percent stake in Safaricom, a move that would push the South African telecom giant’s ownership above majority control level. Kenya’s Parliament had earlier endorsed the proposed transaction before opposition leaders and private petitioners moved to challenge the decision in court.
Opposition politician Kalonzo Musyoka was among those who filed legal action against the transaction, arguing that the sale raises serious questions about national interest, public accountability and foreign control over strategic digital infrastructure.
The High Court also rejected attempts by Vodafone Group and Vodacom to remove themselves as respondents in the case, reinforcing the judiciary’s position that the transaction requires comprehensive constitutional examination.
Safaricom remains Kenya’s largest telecommunications company and one of East Africa’s most profitable corporate entities, controlling a dominant share of the country’s mobile communications and digital payments market through its widely used M-Pesa financial platform. Analysts say any ownership restructuring involving the company carries significant economic and political implications across the region.
Vodacom, which operates across multiple African markets including South Africa, Tanzania, Mozambique and the Democratic Republic of Congo, has been seeking to consolidate its regional telecommunications footprint through increased control of Safaricom as competition intensifies within Africa’s fast-growing digital economy.
Industry observers believe the court’s decision could delay the completion timeline for the transaction and introduce additional regulatory uncertainty surrounding foreign investment in strategic sectors within Kenya. Legal analysts also note that the final ruling may establish a broader precedent for future privatisation and foreign ownership disputes involving state-linked assets in East Africa.
The case is expected to proceed to a full constitutional hearing in the coming months as stakeholders await further judicial clarification on the legality and structure of the proposed Safaricom stake sale.
