Companies
AG distances self from Sh6bn Telkom sale deal
Monday April 10 2023
Solicitor General Shadrack Mose. NMG PHOTO
The inquiry into the payment of Sh6.12 billion for the acquisition of Telkom Kenya has taken a new twist after the Attorney General’s office said it never cleared the final deal.
The State law office told Parliament that the legal opinion of the Attorney General was not issued after the Treasury failed to provide signed documents to facilitate sound legal advice on the deal.
Solicitor General Shadrack Mose said the former Treasury Cabinet Secretary Ukur Yatani failed to furnish the Attorney General with duly executed documents to enable clearance of the deal that saw the exit of Helios Investments LLP from Telkom Kenya.
The Treasury executed the agreements on May 31, 2022, way before seeking the AG’s opinion on August 17, 2022.
The law requires public entities seeking to enter into contracts above Sh2 billion to seek clearance from the Attorney General.
Mr Mose said the Treasury only provided draft documents that were neither dated nor signed by parties in the multi-billion shilling transaction.
The State law office said the Treasury did not respond to its letter dated August 30, 2022 requesting the production of fully executed and attested documents for sound advice.
“From our records, we do not appear to have received a response to our letter above from the National Treasury. The Legal Opinion of the Attorney General was therefore not issued,” Mr Mose said.
The deal saw the government take over 60 percent shareholding of Helios in the telco, giving the government full ownership of the company.
The Treasury paid Sh6.12 billion four days before the August 9, 2022 General Election. The money used to buy out Helios was withdrawn under Article 223 of the Constitution and disbursed on August 5, 2022.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 now declined to rubber-stamp the deal.
“The National Treasury Cabinet Secretary Ukur Yatani forwarded the Deed of Variation and other documents. The documents were not complete, fully signed and dated by parties,” Mr Mose told a joint inquiry team co-chaired by Molo MP Kuria Kimani and John Kiarie (Dagoreti South).
He said Mr Yatani, on April 27, 2022, forwarded to the Attorney General unsigned draft documents that had been presented to the National Treasury by Jamhuri Holdings Limited (JHL) through a letter dated April 19, 2022 for review.
Jamhuri Holdings Limited, a Mauritius registered firm, is a special purpose vehicle that held 60 percent shares in Telkom Kenya on behalf of Helios a UK based private equity firm.
Documents tabled before MPs show the Treasury sought legal advice and submitted several documents long after signing the Share Purchase Agreement on May 31, 2022.
“Although it is past the Long Stop Date, the Attorney General’s opinion is still required to complete the transaction,” Mr Yatani wrote.
“The purpose of this letter, therefore, is to request you to issue a legal opinion in the attached form.”
The incomplete documents submitted include the Deed of Termination regarding the Deed of Amendment and Restatement of Shareholders Agreement dated June 10, 2016 and the Additional Shareholder Agreement dated June 10, 2016 between Telkom Kenya and JHL and Helios and the Treasury Cabinet Secretary on behalf of the government.
Other incomplete documents submitted were deeds of novation between various parties and a share transfer forms between Jamhuri Holdings Limited and the government.
