Retrenched workers secure injunction against Telkom Kenya sale over Sh3.2bn

Nearly 1,000 Telkom Kenya retirees on Thursday won an injunction stopping the company or any of its assets from being sold until it pays them Sh3.2 billion in severance benefits.

Justice Njagi Marete barred the company from entering into sale agreements with a third party regarding the properties until it settles the award granted by the Court of Appeal nearly three years ago to the 997 former workers.

“Pending the interparties hearing of this case, I hereby issue a temporary injunction restraining Telkom Kenya Limited and the Attorney- General, or any person whatsoever acting on their behalf, from entering into a sale of Telkom Kenya to a third party, selling any of its 37 listed properties among others or until it shall have settled the claimants’ dues,” said Justice Marete.

The judge directed the former employees though their lawyer, Antonny Oluoch, to present the orders to Telkom Kenya and Attorney- General Githu Muigai.

They are required to respond to the suit in seven days and appear in court on May 15 for confirmation of compliance as well as further directions.

The retirees who were retrenched in 2006 claim Telkom Kenya has started to dispose of its prime properties in the face of a biting financial crisis that could render it bankrupt.

They contend that disposal of the assets would greatly undermine their payment, which was awarded by the Court of Appeal siting in Nairobi in September 2011.

“The sale would fatally impair the claimants ability to get their award. The sale of the company to a third party or its properties should be stopped until proper agreeable arrangements have been put in place to secure the said payments or settle the award,”  said Mr Oluoch.

He added that Telkom Kenya could end up being insolvent despite disposal of the prime properties and given the liquidity crisis, making it impossible for the former employees to be compensated

The restructuring programme saw contracts for 2,500 employees aged more than 50 years terminated.

READ: Ex-Telkom staff out to stop sale of firm, property

Telkom Kenya was to pay the workers two-and-a-half month’s salary for every year worked and a golden handshake. However, it did not honour the terms of the retrenchment, prompting a section of the workers to file a case in the High Court to press for the dues.

The High Court, through Justice Hatari Waweru, ordered that the package be honoured. The verdict was later upheld by the Court of Appeal after a petition for reversal by Telkom Kenya.

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Telkom Kenya later filed a suit at the Supreme Court seeking certification that the matter raised issues of general public importance, but the application was dismissed.

Telkom Kenya is owned 30 per cent owned by the Kenya government and 70 per cent by France Telecom. It trades in Kenya under the Orange Brand.

Last month, reports indicated that France Telecom was reviewing its operations in Kenya and Uganda and was looking for buyers of the assets.

Although France Telecom declined to confirm the report by London-based online publication, TMT Finance, it stated that it was looking for “strategic partners” to help them jump-start the Kenyan business.

“We still have cash issues. We are developing the company and we need funds to continue doing this,” Telkom Kenya CEO Mikhael Ghossein said last week.

“We need between Sh10 billion and Sh30 billion, but I cannot give you the exact figure since it is not my duty to negotiate for cash,” he added.

Previous capital injections by shareholders have failed to turn around the fortunes of the company whose revenues dropped to Sh9.7 billion in the financial year ending June 2013 from Sh10.2 billion in 2012.