News

Written by Albert Muriuki

A case whose outcome will determine whether the Sh34 billion Safaricom initial public offering will go on as planned resumes on Wednesday after last week’s filing of statements by the two parties.

Three members of Parliament led by Prof Anyang’ Nyong’o are seeking to stop the flotation of a 25 per cent stake in the region’s most profitable company until a new law — the Privatisation Act — is operationalised.

Although the legislators have stated that the Safaricom IPO was being carried out without any legal framework in the absence of enforcing the above law, Treasury permanent secretary Joseph Kinyua said it was being done under the Treasury Incorporation Act, which empowers Treasury to buy and sell assets on behalf of the public. “It is not true that the process is illegal or in violation of the Law,” Mr Kinyua said in a statement as Safaricom appointed two law firms Daly & Figgis and Mohammed & Muigai — to safeguard its interests in the case.

The case is being heard by Justice Joseph Nyamu, while the lawyers are being represented by Mr James Orengo. Prof Nyong’o argues that prior to 2002, the government had taken a piecemeal programme for divestiture of public corporations, saying there is need for Safaricom IPO to wait until the privatisation Act is in place.

Mr Kinyua, however, points out that the Public Enterprise Reform and Privatisation Programme established in 1992 had been guiding the programme. Shares in over 100 parastatals and corporations have been disposed of since then.

Before the Privatisation Act comes into force, Mr Kinyua said, there were transitional provisions under the Act that enabled ongoing programmes to continue.

“The Privatisation Act 2005 did not stop the government Privatisation Programme,” he said. He dispelled assertions that Safaricom was considering cross listing in a foreign exchange market, stating that the company will be primarily listed on the Nairobi Stock Exchange (NSE).