MPs’ demands add to doubts on Telkom sale

Corporate News

Former employees of the company have got two court injunctions stopping the sale by France Telecom.  

By EDWIN MUTAI, emutai@ke.nationmedia.com

In Summary

• The Public Investment Committee (PIC) has asked the Treasury to renegotiate the deal with France Telecom with a view to recovering a higher shareholding of at least 35.1 per cent in line with its contribution of Sh2.5 billion to Telkom Kenya’s capital injection in 2012.
• The demand by MPs further adds to the uncertainty surrounding the planned sale of Telkom Kenya.
• Former employees of the company have got two court injunctions stopping the sale by France Telecom.

MPs have ordered the Treasury to recover Sh2.5 billion paid to Telkom Kenya as part of a shareholders’ rights issue in a development that could further delay the intended sale of a stake by the company.

The Public Investment Committee (PIC) has asked the Treasury to renegotiate the deal with France Telecom with a view to recovering a higher shareholding of at least 35.1 per cent in line with its contribution of Sh2.5 billion to Telkom Kenya’s capital injection in 2012.

Telkom Kenya is jointly owned by France Telecom, which controls 70 per cent of the company and the Treasury that has a 30 per cent stake in the telecommunications firm.

READ: Court stops Telkom Kenya sale

“The Cabinet secretary Treasury Henry Rotich should ensure that the Sh2.5 billion paid by the Treasury is refunded together with interest at market rate backdated to January 1, 2013,” says a report of the Public Investment Committee on the Privatisation, Recapitalisation and Restructuring of the Balance Sheet of Telkom Kenya Limited.

The demand by MPs further adds to the uncertainty surrounding the planned sale of Telkom Kenya.

Former employees of the company have got two court injunctions stopping the sale by France Telecom.

The committee, chaired by Eldas MP Adan Keynan, has recommended that the Ethics and Anti-Corruption Commission (EACC) “investigates the entire process of privatisation, recapitalisation and restructuring of the balance sheet of Telkom Kenya Limited from 2007 to date.