EACC gives Telkom Kenya sale a clean bill of health

The Ethics and Anti-Corruption Commission (EACC) has terminated investigations into allegation of irregular privatisation, conflict of interest and restructuring of Telkom Kenya’s balance sheet.

The EACC said investigations established that the process of privatisation of Telkom Kenya was above board as there was no evidence of impropriety or culpability of the public officials involved in the process.

“A report was prepared and forwarded to the Director of Public Prosecution (DPP) on July 22, 2020 with recommendation that the investigation file on allegations of irregular privatization, conflict of interest and restructuring of TKL balance sheet be closed with no further action for lack of evidence in support,” EACC said in the third quarterly report covering the period from July 1 to September, 2020.

The report, tabled in Parliament last month, clears Telkom’s recapitalisation deal that was first approved in 2012.

The EACC opened the probe following allegations that the National Treasury committed the government to sign the recapitalisation and restructuring agreement without making sure that there was adequate budgetary provision to defend its stake in the telco. It was alleged that the Treasury failed to avail the government’s capital contribution of Sh2.4 billion six months after signing the agreement. This exposed the government to a loss of 10 percent stake in Telkom, with its stake falling from 40 percent to 30 percent. The ownership of French multinational Orange, the treasury’s partner in the joint venture at the time, meanwhile rose to 70 percent.

Orange’s enlarged stake included an additional 11 percent stake it had acquired in Telkom in 2013 from a Dubai-based private equity firm.

In June 2016, private equity firm Helios Investment Partners acquired a 60 percent stake in Telkom in a deal that saw the treasury’s stake restored to 40 percent as Orange exited.