Attorney general denies involvement in Telkom Kenya share dilution deal

Attorney general denies involvement in Telkom Kenya share dilution deal

CC image courtesy of brf on Flickr

Githu Muigai, Kenya’s attorney general (AG), has disowned the controversial sale of Telkom Kenya to France Telecom, which saw government share in Kenya’s oldest telecommunications company diluted to 30 per cent.

Speaking after he appeared before the Parliamentary Public Investment Committee (PIC), Kenya’s AG said he wants the transaction renegotiated as his office was not consulted on the deal.

“Throughout these transactions the office of the AG was not involved in any aspect whatsoever,” Muigai said.

He said he cautioned the National Treasury, but they requested to be allowed to finish the process.

“Mr Chairman on who should be blamed this matter we need to ask ourselves who made the business decision,” said Muigai. “It appears it was made by the Treasury and if something had gone wrong with the judgment that was made then it lies squarely with the Treasury.”

Muigai said the Treasury decided to hire independent lawyers to oversee the transaction without seeking advice from his office.

Speaking while appearing before the same committee however, the National Treasury cabinet secretary Henry Rotich said the government renegotiated its stake in Telkom Kenya to 30 per cent to avoid a decline in its ownership to 13 per cent.

“After making a string of losses, it was necessary to inject capital to save Telkom Kenya from its insolvency position,” said Rotich.

“The restructuring proposal was approved by cabinet on November 22, 2012, and the agreement was cleared by the Attorney General on December 20, 2012. That was before the Treasury appended its signature.”

Adan Keynan, chair of the PIC, said:“The absence of the office of the AG in such mega transaction creates a lot of suspicion.”

HumanIPO reported in August the PIC was investigating circumstances in which France Telecom wrote off a KSh34 billion (US$394 million) debt that Telkom Kenya, through the Treasury, owed in exchange for a 9 per cent shareholding in the company leading to a drop from 49 per cent to 40 per cent of government shares.

This further dropped to 30 per cent in June this year, after the Treasury failed to make a capital injection of the remaining part of KSh4.9 billion (US$56 million) it was required to put in the operator’s KSh10 billion (US$114 million) cash call.

The Communications Commission of Kenya (CCK), the Privatisation Commission of Kenya and the Auditor General Office, who have all appeared before the parliamentary committee, have all denied any knowledge of the deal.

Posted in: FeaturedTelecoms

Latest headlines

Latest by Category

Tweets about "humanipo"