The parliamentary committees investigating the circumstances under which the government paid Sh6 billion to purchase shares in Telkom Kenya from the UK-based private equity firm, Helios Partners, must get to the bottom of this patently dodgy transaction.
Is it not the height of irony that nearly eight months since the deal concluded, we are still being told that Telkom Kenya is still legally under controlling ownership of the private equity firm that is managed by the flamboyant Nigerian investment banker, Mr Babatonde Soyoye?
When I checked, the explanation I got was that the formal transfer of shares could not take place because Telkom Kenya’s board did not have a quorum at the time the transaction was taking place.
The tenures of Mr Jinaro Kibet and Dorcas Kombo had expired while directors representing Helios had left. Incidentally, Kibet and Mrs Kombo have only recently been re-appointed to the board of the company.
The biggest riddle in this transaction was its timing. What was the motive behind the hurry to consummate this deal and pay out the billions just before a new regime took over power?
Granted, it is an open secret that relations between the government and Helios had not been placid for a long time. The foreign investor did not like the manner in which the government literally confiscated the most valuable property in the company’s books-namely- the Ngong Road plot on which the Ministry of Sports has built a stadium.
Yet another source of tension between the parties was the decision by the government to scuttle the planned merger of Telkom Kenya with Airtel.
Still, these are not good enough reasons to hurriedly release billions from State coffers in such a dodgy manner.
The testimony by the Controller of Budget, Ms Margaret Nyakango that she was forced to approve the massive payment also suggests that there was more than meets the eye in this transaction.
As I followed and studied the line of questioning and the issues which parliamentarians investigating this transaction were raising, it seemed to me that the legislators were drawing parallels with events that took place in Nigeria a few years ago.
There, it was discovered that an SEC-registered private equity firm had invested in companies that turned out to be fronts for laundering money illicitly acquired by the former governor of Nigeria’s oil-rich Delta State- Mr James Ibori.
Investigations found that Mr Ibori used one of the fronts to acquire assets of the privatised National Fertiliser Corporation.
Private equity companies mostly invest on behalf of funds they advise and detecting ultimate beneficial ownership is not easy.
We must all wait and see whether the investigations by our MPs will come up with any smoking guns and prove beyond doubt that there were fronts and shadowy parties that were pulling strings behind the scenes to have this transaction consummated before a change of government.
Even if you give the administration of former President Uhuru Kenyatta the benefit of the doubt that it had benign and good intentions in seeking to quit the marriage with Helios, several pertinent questions arise: did they want to make Telkom Kenya a parastatal? If so, did they assess the implications of such a move?
In retrospect, it seems to me that the unstated intention of the former administration was to quietly reduce Telkom’s place as the focal point of the State’s interest in the telecommunications sector and to elevate the status of the new entity the former president Kenyatta created by decree in December 2020 – Embakasi Garrison-based the National Security Telecommunications Service.
This entity was ostensibly created to fill the gaps in telecommunications with the security sector. Yet when it came to assigning the lucrative 5G spectrum in 2021, it is the entity that was assigned the lion’s share.
Away from the public domain, the government was putting immense pressure on Telkom to transfer nearly all State-owned telecommunication assets the company manages, including the National Fibre Optic network, landing sites, data centres, and landing sites to this entity.
The parliamentary committee should give us a road map for Telkom Kenya going forward.
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