By: BRIAN NGUGI
France Telecom on Monday sold its stake in Telkom Kenya, just months after selling off the company’s properties and increasing its shareholding through a process described by MPs as unprocedural.
The announcement that Helios Investment Partners, a London-based firm, had agreed to buy the entire 70 per cent holding — at an undisclosed fee — triggered calls for the government to disclose publicly the terms before the deal is approved. The government holds a 30 per cent stake, after selling its 41 per cent stake under questionable circumstances.
In a statement issued on Monday, Orange Telecom said its decision “reflects its constant focus on optimising its portfolio of assets.”
TERMS OF SALE
On Tuesday, consumer lobby groups piled pressure on the National Treasury to disclose the terms of the proposed sale in the interest of the public.
“Public interest must be secured by ensuring that the deal does not occasion further dilution to the government’s stake. In the interest of transparency, the value of the transaction, including the monetary offer made by Helios, ought to be disclosed,” said Mr Kamotho Njenga, ICT Association of Kenya secretary-general.
Consumer Federation of Kenya secretary-general Stephen Mutoro said the transaction should not be approved until the government divulges full details of the purchase agreement.
Telkom Kenya is jointly owned by the National Treasury and France Telecom, which was in 2007 allowed to buy a majority stake in the loss-making company after undertaking to turn around its fortunes.
In 2013, the Public Investments Committee chaired by Mr Adan Keynan investigated a transaction that diluted the government’s stake in Telkom Kenya to 30 per cent. The committee said the deal was “a very well calculated plan to fleece the people of Kenya”.
PIC questioned the restructuring and its legality, saying that both parties had colluded to rob the government of its shareholding in the third largest mobile operator. Analysts have described the privatisation deal as the main problem that bled Telkom Kenya to instability when other players in the sector were growing.
On Tuesday, in a telephone interview with the Nation, Mr Keynan said: “The purported sale of Telkom Kenya is an affront on the institution of government. It stands in breach of the National Assembly, which has categorically stated that before any sale, an assets registry detailing full ownership of Telkom Kenya must be made available.”
Monday’s sale to Helios will pave the way for France Telecom’s exit while the government will retain its 30 per cent stake.
Neither National Treasury Cabinet Secretary Henry Rotich nor his Principal Secretary Kamau Thugge picked our calls when sought to disclose information on the nature of the agreement.
Helios emerged as one of a number of bidders attempting to acquire some or all of Orange’s stake in Kenya’s fixed incumbent and third largest mobile operator in September, which has been up for sale for some time. Previous bids for the entity have failed, including one from Vietnam’s Viettel Group at the end of last year.
Telkom Kenya had four million customers at the end of June this year, lagging behind its rival Airtel, which had seven million customers at the time and market leader Safaricom, with more than 24 million, according to the Communications Authority of Kenya.
SOURCE: DAILY NATION