Kalonzo: Sale of Safaricom was a national abduction

Wiper Party leader Kalonzo Musyoka has vehemently criticised the Kenyan government's recent sale of a 15% stake in Safaricom PLC to Vodacom, labelling it a "national abduction." The core of his contention lies in the timing of the transaction, which was concluded despite a substantive constitutional petition challenging its legality remaining pending before the High Court. While conservatory orders previously halting the sale were lifted by the Court of Appeal, the ongoing legal challenge raises critical questions about the principles of public finance, transparency, public participation, and the rule of law in the disposal of strategic national assets. This article delves into the legal implications of proceeding with a significant government transaction under judicial scrutiny, examining the interplay between judicial review, constitutional safeguards, and the concept of *sub judice* in Kenya's legal landscape.

The recent sale of a 15% government stake in Safaricom PLC to Vodacom has ignited a fierce legal and political debate in Kenya, with Wiper Party leader Kalonzo Musyoka describing the transaction as a "national abduction." This strong condemnation stems from the fact that the multi-billion-shilling deal was finalised while a constitutional petition challenging its legality remains pending before the High Court. The government's divestment, which reduced its shareholding from 35% to 20% and granted Vodacom majority control of Safaricom, has brought to the fore fundamental questions regarding the management of public assets and adherence to constitutional principles.

Musyoka's concerns are not merely political; they are rooted in significant legal challenges regarding transparency, valuation, and constitutional compliance. He specifically questioned the haste with which the National Treasury proceeded to complete the sale, particularly after the Court of Appeal lifted earlier conservatory orders that had temporarily halted the transaction. The High Court is still expected to deliver its final ruling on the substantive petition, prompting scrutiny into the efficacy of constitutional litigation when the subject matter of the dispute is concluded before a final judicial determination.

This article will explore the legal framework governing public asset disposal in Kenya, the role of constitutional petitions and conservatory orders in safeguarding public interest, and the implications of such transactions proceeding while under judicial challenge. It aims to provide practitioners with a comprehensive understanding of the legal complexities and potential ramifications arising from the government's actions in the Safaricom sale.

The legal framework for public finance and asset disposal in Kenya is primarily enshrined in the Constitution of Kenya, 2010, and elaborated through specific statutes. Article 201 of the Constitution sets out the principles of public finance, mandating openness, accountability, and public participation in financial matters, alongside the prudent and responsible use of public resources. Complementing this, Article 227 requires that any state organ or public entity contracting for goods or services, or disposing of assets, must do so in accordance with a system that is fair, equitable, transparent, competitive, and cost-effective.

To give effect to Article 227, Parliament enacted the Public Procurement and Asset Disposal Act, 2015 (PPADA). This Act provides comprehensive procedures for efficient public procurement and asset disposal by public entities, including state corporations and companies where the government holds a controlling majority of shares, such as Safaricom. The PPADA aims to ensure transparency, accountability, and value for money in public transactions, addressing shortcomings of previous legislation and aligning with the constitutional dictates.

In the context of judicial oversight, the High Court's power to issue conservatory orders in constitutional petitions, as provided under Article 23(3)(c) of the Constitution, is crucial. Conservatory orders are designed to preserve the subject matter of a petition, preventing it from being rendered nugatory, and to uphold the adjudicatory authority of the court, particularly in matters of public interest. The concept of *sub judice*, which generally restricts public discussion of matters pending before a court to prevent prejudice to ongoing proceedings, also forms a critical part of Kenya's legal tradition, imported through the Judicature Act (Cap. 8).

The controversy surrounding the Safaricom stake sale highlights a tension between governmental prerogative in managing public assets and the constitutional imperative for transparency, accountability, and judicial oversight. Kalonzo Musyoka's argument that the sale was an "economic abduction" and "constitutionally suspect" hinges on allegations of undervaluation, opacity, and a lack of meaningful public participation. These claims directly invoke the principles enshrined in Article 10 (national values and principles of governance, including public participation) and Article 201 (principles of public finance) of the Constitution.

The critical legal point is the government's decision to proceed with the transaction after the Court of Appeal lifted conservatory orders, but before the High Court delivered its final determination on the substantive constitutional petition. While the lifting of conservatory orders by a higher court typically allows the status quo ante to resume, it does not validate the underlying transaction or render the pending petition moot. Conservatory orders are interim measures; their lifting merely removes the temporary injunction, but the constitutional questions raised in the main petition remain alive and require a definitive judicial pronouncement.

Practitioners must note the expanded scope of judicial review under the Constitution of Kenya, 2010, and the Fair Administrative Action Act, 2015. Courts are no longer strictly confined to reviewing the procedural propriety of administrative actions but can, in certain circumstances, delve into the merits of a decision, especially where constitutional rights or public interest are at stake. This means that even if the transaction has been concluded, a successful constitutional petition could potentially lead to a declaration of invalidity, an order for compensation, or other appropriate relief, including the possibility of nullifying the sale.

The argument of undervaluation, with claims that the shares were sold at KSh 34 per share against an estimated fair market value of KSh 57.90, directly challenges the "cost-effective" and "prudent use of public resources" mandates of Article 227 and Article 201. Such allegations necessitate a thorough judicial inquiry into the valuation process and whether it adhered to the principles of transparency and accountability required by the PPADA. The government's justification that the proceeds are for the National Infrastructure Fund, while a public interest objective, does not automatically override constitutional and statutory requirements for the disposal process itself.

Furthermore, the concept of *sub judice*, though debated in its application to public discourse, is intended to protect the integrity of judicial proceedings. While the government may argue that the lifting of conservatory orders cleared the path, the continued pendency of the substantive petition implies that the matter is still under judicial consideration. Proceeding with a transaction that is the very subject of a constitutional challenge, particularly one involving a strategic national asset like Safaricom, risks undermining public confidence in the judiciary and the rule of law. The High Court's impending ruling will be crucial in clarifying the legal boundaries and consequences for government entities that conclude transactions while their constitutional validity is still being adjudicated.

The government's sale of a 15% stake in Safaricom, despite a pending constitutional petition, underscores the persistent challenges in balancing executive action with judicial oversight and public interest in Kenya. While the lifting of conservatory orders by the Court of Appeal allowed the transaction to proceed, the High Court's forthcoming judgment on the substantive petition remains a pivotal moment for Kenya's constitutional jurisprudence on public asset disposal. The case highlights the critical role of constitutional litigation in holding state organs accountable to the principles of transparency, public participation, and prudent financial management as enshrined in the Constitution and the Public Procurement and Asset Disposal Act.

For legal practitioners, this scenario reinforces the importance of meticulous due diligence and risk assessment in advising clients on transactions involving public entities. The potential for a concluded transaction to be subsequently declared unconstitutional, even after interim orders are lifted, presents significant legal and commercial risks. It underscores the need for government entities to ensure robust adherence to constitutional and statutory requirements, including genuine public participation and transparent valuation processes, to withstand judicial scrutiny. All eyes will be on the High Court's decision, which is expected to provide crucial guidance on the enforceability of constitutional safeguards in the face of executive action and the ultimate protection offered by constitutional litigation to the ordinary citizen.