A director of a foreign company that earned Sh6.12 billion to exit Telkom Kenya has named former president Uhuru Kenyatta’s ally John Ngumi as one of the transaction advisors in the controversial deal.
Paul Cummingharm, the director of Jamhuri Holdings Limited, said talks for the exit of Helios were undertaken by transaction advisors paving the way for the deal that was done four days before last year’s General Elections.
Mr Cummingharm, a UK national, told a joint parliamentary inquiry team that he never met former Treasury Cabinet Secretary Ukur Yatani, top treasury officials or Telkom Kenya board and management during the negotiations for Helios Investments LLP to exit the telco.
Jamhuri Holdings is the special-purpose vehicle for Helios Investments in Telkom.
Mr Cummigharm said the “negotiations took place between the government and representatives of Jamhuri Holdings and other members of Helios acting either directly or through our transaction advisors.”
Mr Cummigharm named the transaction advisors as Stanbic Bank and former banker John Ngumi, who was at the time chairman of Safaricom, a competitor of Telkom.
Ngumi however resigned from Safaricom six months after he took charge of East Africa’s most profitable company and several weeks after the Ruto administration took over.
Mr Ngumi was seen as a blue-eyed boy in the Uhuru administration in which he was handed chairman positions in cash-rich parastatals, among them the Industrial & Commercial Development Corporation, which was in charge of the Kenya Transport & Logistics Network that had Kenya Ports Authority, Kenya Pipeline Company Limited and Kenya Railways Corporation.
He also served on the board of the national carrier Kenya Airways.
Cummingharm told members that Helios Investments Partners has worked with Mr Ngumi on a number of transactions that predates its investments in Telkom Kenya.
After the deal, the government ended up fully owning Telkom Kenya after the purchase of Helios’ 60 percent stake.
The Sh6.12 billion used to buy out Helios was withdrawn under Article 223 of the Constitution and disbursed on August 5, 2022.
Approval for the expenditure was to be done later but Parliament has declined to rubber-stamp the deal.
“We paid $4.5 million (Sh596.79 million) for legal, banking transactions and other fees. I do not know the specific amount each party in this transaction was paid,” said Mr Cummigharm.
He said part of the Sh6.12 billion payout went to reward top management officials at Telkom Kenya.
“This payment is typical of any private equity investments. There is a need to incentivise the management team. The payment went to both current and former employees,” he said.
Mr Cummigharm said the incentive that was instigated when the firm invested in 2016 went to the senior management team at Telkom Kenya was managed by a third party because it was structured as a trust.
“The third party was Adili Trustees based in Kenya,” he said.
Asked whether he met any Treasury official or Telkom Kenya board members during the negotiations for Helios’ exit, Mr Cummigharm said he was last in Kenya 32 years ago.
“I never met Mr Yattani. I never met anyone at the Treasury or Telkom Kenya during this transaction. I only had email correspondence with Mr Yattani. I do not recall any telephone conversation,” said Mr Cummigharm.
He denied knowing former ICT Cabinet Secretary Joe Mucheru and former Telkom Kenya chairman Eddy Njoroge.
“I have not met members of Telkom Kenya board or management. I know Eddy Njoroge because we have corresponded through letters but I have never met him in person. All correspondence has been in writing over email. I have no reason to talk over the phone or Zoom,” he said.
Molo MP Kuria Kimani demanded that Mr Cummigharm table a detailed breakdown of the sharing of the proceeds of Sh6.12 billion.
