Safaricom IPO legal challenge begins

26 Nov 2007

A legal case has begun which is calling for the sale of shares in Kenya’s largest cellular operator to be halted. Opposition politicians Anyang’ Nyong’o, Omingo Magara and Mwandawiro Mghanga of Kenya’s Orange Democratic Movement want an initial public offer (IPO) of Safaricom shares postponed until the new Privatisation Law is brought in. The Act was approved by parliament in October 2005 but has still to be enacted. The new legislation would create an independent Privatisation Commission to oversee all government sell-offs. A Safaricom spokesperson told Nairobi newspaper Business Daily that the legal challenge is futile since the IPO is now in its final stages and is ‘not reversible’. The draft prospectus of the sale has already been presented to the financial regulator, the Capital Markets Authority, for approval. The government plans to sell off a 25% stake in Safaricom, leaving it with a 35% interest. Vodafone Kenya, which has the UK’s Vodafone Group as a majority shareholder, has a 40% stake.

Kenya, Safaricom