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Cabinet demands investor to refund Sh6.09B that was paid days before elections

The money was paid by Treasury days before the August 2022 General Election

President William Ruto during a Cabinet meeting at State House, Nairobi on October 3, 2023

Cabinet has reversed the government’s decision to purchase 60% of Telkom Kenya shares from Jamhuri Holdings Limited (JHL), a company owned 100% by Helios Investments Partners.

According to dispatch from Tuesday’s Cabinet meeting chaired by President William Ruto at State House, the decision was made to address the governance challenges.

There was concern over the nationalization of Telkom Kenya in the run-up to the 2022 General Election.

As a result of this decision, Jamhuri/Helios will refund the government the amount paid as consideration for the takeover, which amounts to Sh6.09 billion.

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Telkom Kenya will now have to source and onboard another strategic investor, subject to the receipt of all regulatory approvals.

The buyback of Telkom shares months before the General Election was controversial, with President Ruto’s administration expressing concern over the transaction.

The Uhuru Kenyatta administration argued that it was necessary to buy out Helios due to the strategic nature of Telkom, which runs some key assets relied on for government communications, including a national fibre-optic network

A Parliamentary inquiry was launched to probe the transaction in 2023.

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The Parliamentary Committee was told that the decision to sell back the shareholding of Telkom Kenya was prompted by the failure to attain shareholder alignment on the company’s strategic direction.

Jamuhuri Holdings said that the government’s disapproval of a possible merger transaction with Airtel Kenya resulted in possible major losses.

Paul Cunningham, the Chief Finance Officer (CFO) and Director of Jamhuri Holdings revealed that the current top management of Telkom Kenya, excluding board members, were paid some compensation from the fees paid for the buyback, making them direct beneficiaries of the transaction.

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