The Kenyan government has made a significant move to address the challenges facing Telkom Kenya Limited by revoking the previous administration’s decision to acquire ownership of the telecommunications company.
This strategic shift comes in response to the intense competition prevailing in the telecom sector.
Last year, the Treasury took a controversial step by overruling the Controller of Budget’s position and disbursed Sh6.09 billion to purchase a 60 percent stake in Telkom Kenya from the UK-based private equity fund, Helios Investment Partners.
This transaction occurred just four days before the 2022 General Election.
Controller of Budget Margaret Nyakang’o revealed that she had declined to authorize the disbursement of billions for the acquisition of Telkom Kenya, emphasizing that the deal resulted in the company becoming fully state-owned.
The Treasury executed the payment to Jamhuri Holdings Ltd, a subsidiary of Helios based in Mauritius, in a transaction that lacked parliamentary approval.
Now, the government is seeking the refund of the disbursed funds.
The decision, endorsed by the Cabinet, offers Telkom Kenya an opportunity to seek and bring on board another strategic investor, contingent upon obtaining all necessary regulatory approvals.
“The decision by Cabinet offers Telkom Kenya an opportunity to source and onboard another strategic investor, subject to the receipt of all regulatory approvals,” the cabinets agreed.
This intervention by the Cabinet is anticipated to strengthen Telkom Kenya‘s operational capabilities and position it as a competitive player within the telecommunications market.
This move signals a pivotal change in the ownership structure of Telkom Kenya, aiming to provide the telco with the necessary resources and flexibility to navigate the challenging landscape of the telecommunications industry in Kenya.
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