28th September 2026
In a Judgment delivered on 15th September 2026 in Gachoka & 3 others v The Cabinet Secretary, The National Treasury & 11 others, Petition No. E051 of 2026, a three-judge bench of the High Court declared the divestiture of the Government’s 15% shareholding in Safaricom PLC unconstitutional, null and void. The Government lost even though it won almost every statutory argument: what Cabinet, Parliament and the public approved was not what the Treasury executed.
On 15th September 2026 a three-judge bench of the High Court at Milimani (Gikonyo, Aburili and Ouya, JJ) declared the divestiture of the Government of Kenya’s 15% shareholding in Safaricom PLC unconstitutional, null and void: Gachoka & 3 others v The Cabinet Secretary, The National Treasury & 11 others, Petition No. E051 of 2026 (consolidated with E831 and E836 of 2025). It quashed Sessional Paper No. 3 of 2025, the parliamentary approval, all consents and agreements and the takeover, and restored the shares.
The Government lost even though it won almost every statutory argument. The divestiture was correctly anchored on Section 87A of the Public Finance Management Act; neither the Privatization Act, 2025 nor the Public Procurement and Asset Disposal Act, 2015 governed a sale of shares; and the Court declined to decide whether KES 34 per share was the wrong price. It collapsed because what Cabinet, Parliament and the public approved was not what the Treasury executed.
The Transaction
The Sessional Paper proposed the sale of 6,009,814,200 shares (15% of Safaricom PLC) at KES 34 for about KES 204.3 billion, the Government retaining 20% and taking KES 40.2 billion upfront for future dividends. Vodafone Kenya Limited was also to buy Vodafone International Holdings BV’s 12.5% interest, lifting its holding to 55% and Vodacom Group’s interest in Vodafone Kenya to 100%.
Right Statute, Wrong Process
Safaricom PLC, with Government at 35%, was a “national government-linked corporation”: Section 4 of the Privatization Act, 2025 excludes sales leading to dilution, Section 4(2)(d) of the Public Procurement and Asset Disposal Act excludes sales of shares, and the Public Private Partnerships Act governs project agreements, not ownership transfers. What remained was Section 87A of the Public Finance Management Act.
But Section 87A is expressly subject to that Act as a whole and to the Constitution, and Part 3 of Chapter 12 does not list the sale of public shareholdings among the modes of raising national revenue. Section 87A is a gateway, not the standard by which a divestiture is measured; that lies in Articles 10, 118, 201, 206 and 238.
The proceeds were to go into the National Infrastructure Fund under Act No. 4 of 2026. Article 206(1)(a) permits a fund for a specific purpose, but Section 19 gives its Board wide powers to invest, sell and dispose of investments, so nothing was ring-fenced: that requires specific, identified, costed and located projects, whereas the Sessional Paper spoke only in general terms. Articles 201 and 206 were breached.
The Buyer and the Sequence
The Sessional Paper named Vodacom Group as the buyer, with commitments on redundancies, a Kenyan chairman and majority Kenyan independent directors. Cabinet approved, the Joint Committee reported and public participation was conducted on that basis.
The Share Purchase Agreement, the Dividend Rights Purchase Agreement and the Relationship and Cooperation Agreement were, however, concluded with Vodafone Kenya Limited on 3rd December 2025 — a fact that emerged from the Attorney General’s Legal Opinion of 25th March 2026.
Applying Salomon v Salomon [1897] AC 22, the Court held that a holding company and its subsidiary remain separate legal persons, so the approved buyer could not be substituted without repeating public participation and approval, novation being unavailable in a statutory process. Cabinet and the National Assembly approved no divestiture in favour of Vodafone Kenya Limited.
The chronology damned the process. The transaction adviser was engaged on 31st October 2025 on terms of reference seeking merger and acquisition advisory services, the engagement letter already recording KES 34 per share; the valuation report followed on 21st November 2025; the agreements were signed on 3rd December 2025; the Sessional Paper was tabled on 4th December 2025; and the National Assembly approved on 31st March 2026, six days after the Attorney General’s Legal Opinion.
The Legal Opinion was issued to satisfy conditions precedent in agreements already signed; invoking Article 156, the Court held it ought to have preceded any formal agreement, and noted that it adverted to a parliamentary approval of 31st March 2026 that had not yet occurred. The policy process followed a Government already bound to a buyer, a structure and a price.
Non-Disclosure and Public Participation
The Share Purchase Agreement and the Dividend Rights Purchase Agreement were never placed before the Court; of the Relationship and Cooperation Agreement, only the cover page and pages 12 and 13 were supplied. At Clause 7.2 the Government acknowledges that the undertakings at Clauses 7.1 and 7.3 do not bind Vodafone Kenya Limited, so the protections marketed to the public were non-binding.
The most consequential holding concerns disclosure. Article 35 and the Access to Information Act enable public participation; they do not limit the State’s obligations. Under Article 10 the Government must place before the public, Cabinet and the National Assembly all substantive information forming the core of the policy, without awaiting a request; having never invoked the Section 6 limitations, it could not raise confidentiality in court.
On the British American Tobacco principles, the quantitative dimension was satisfied — 32 committee sittings, 78 institutions, hearings in 30 counties — but the qualitative dimension failed twice over: the National Assembly consulted on information vitiated by obscurity as to the buyer, misrepresentation and the withholding of the defining agreements; and there was no participation at all at policy formulation, the Sessional Paper being what ought to have been its product. Articles 10 and 118 were violated.
Pricing
The Petitioners put the shares at KES 70 to KES 80 and faulted the failure to value M-PESA separately; the Respondents relied on KES 34 as a 23% premium over the six-month average of KES 27.50. Following Kenya National Examinations Council v Republic ex parte Ouru [2010] KECA 21 (KLR) the Court declined that contest, but struck the pricing down because KES 34 appears in the engagement letter of 31st October 2025, three weeks before the valuation report. The advisers’ procurement, unexplained, was declared contrary to Article 227.
A Takeover in Substance
Vodafone Kenya Limited’s own announcement of 3rd December 2025 was issued under Regulation 4(3) of the Take-Overs and Mergers Regulations, 2002, signaling an application for exemption from the mandatory offer. Against Regulation 2, which treats the right to exercise not less than twenty-five per cent of the votes as effective control, and Section 41 of the Competition Act, which includes a takeover in the definition of a merger, this was a takeover — disclosed neither in the Sessional Paper nor during public participation.
The Capital Markets Authority’s letter of 27th February 2026 declined the approval sought as ultra vires and no exemption instrument was produced. On merger control the finding is categorical: there was no notification to or approval by the Competition Authority of Kenya, and under Section 42(3) of the Competition Act a merger implemented without an authorizing order has no legal effect.
National Security and Intergenerational Equity
No National Security Impact Assessment was conducted, although Safaricom PLC hosts the IEBC’s result transmission network, government payment platforms and the data of over 35 million citizens.
Article 238 requires proactive protection: risks must be identified and mitigated before the State relinquishes control. Retained regulatory jurisdiction and Kenyan directors were insufficient, the more so where those safeguards were not in the Share Purchase Agreement and the undertakings expressly did not bind the buyer. A 55% foreign majority holding places management, assets, data and control in foreign hands.
On intergenerational equity, the Court adopted the Auditor General’s observation that the upfront dividend monetization converts a perpetual income stream into a single payment, contrary to Articles 10(2)(d) and 201(c). That the shares trade freely on the Exchange was no answer: the 15% went to one foreign entity acquiring control.
The Orders
The Court declared the divestiture a public policy decision subject to Articles 10 and 201, approved without meaningful public participation, marred by obscurity as to the buyer, misrepresentation and concealment of material information, and in substance a merger and takeover conferring effective control on a 55% foreign majority shareholder in violation of the Capital Markets Act, the Take-Overs and Mergers Regulations and the Competition Act. Certiorari quashed the Sessional Paper, the approval, all consents and the takeover.
Relying on Benjamin Leonard MacFoy v United Africa Co Ltd [1961] 3 All ER 1169 — “you cannot put something on nothing and expect it to stay there; it will collapse” — the Court treated everything founded on an invalid process as equally invalid, and took the Court of Appeal at its word in its earlier ruling in this matter, [2026] KECA 1218 (KLR), where the transaction was not halted because the shares could be restored.
What the Judgment Means
For Government and Parliament. Section 87A survives but not the assumption that approvals equal constitutional compliance: participation must precede the policy, a security impact assessment is required for critical infrastructure, and the Section 87A(4) memorandum must describe the transaction actually to be executed. For investors and advisers. The seller’s constitutional process is the buyer’s principal risk and it survives completion: an opinion post-dating signature gave no protection, and contracting through an unapproved group entity was fatal.
The judgment is not against privatization, foreign investment or the monetization of public assets, but about whether the transaction placed before the people, the Cabinet and Parliament is the one the State intends to execute. Here it was not. An appeal is expected; until then the instruction is short — the approvals must match the deal, and the disclosure must come before the signature.
Disclaimer: This legal alert is meant for general information only and should not be construed otherwise. You are hereby advised, in all circumstances, to seek clarification from Victor Kaula (victor@oklawllp.com), Yonah Ougo (yonah@oklawllp.com) or OK Law Advocates LLP (legal@oklawllp.com).