Airtel, Telkom merger on track after EACC hurdle

The anti-corruption commission has cleared the deal between Telkom Kenya and Airtel after it acknowledged that Telkom is a private company, technically meaning that the proposed tie-up cannot be investigated since it is a commercial agreement.

In August, MPs had asked the Ethics and Anti-Corruption Commission (EACC) to investigate how the merger deal was brokered and whether the government’s interests would be safeguarded after the merger.

In a letter to the Communication Authority of Kenya (CA), the commission now says that “preliminary investigation has established that TKL (Telkom Kenya Ltd) is a private company jointly owned by the Government of Kenya through Cabinet Secretary, National Treasury and Helios Investors Fund III LLP (Helios) through Jamhuri Holdings Limited.”

The government owns 40 percent of the shares while Helios holds the remaining 60.

That means Telkom Kenya is not subject to the State Corporations Act, and by implication, it cannot be investigated by the EACC as MPs had demanded.

On Friday, the CA said it was yet to receive the letter from EACC. “CA is yet to receive EACC clearance to progress the merger,” said the regulator.

Besides obtaining the EACC clean bill of health, CA also said that the two telcos will be required to clear any debts before their merger can be approved.

Safaricom has asked CA not to approve the merger before Telkom and Airtel clear the Sh906.6 million and Sh390.7 million that they owe respectively for interconnection, co-location and fibre services.