Orange Group says it has ‘lost control’ of Kenyan unit

26 Feb 2015

France’s Orange Group has revealed that it has lost control over Telkom Kenya, in which it holds a 70% stake, after failing to implement certain solutions in response to the fixed and mobile operator’s financial difficulties. In its financial statements for the year ended 31 December 2014, Orange said that due to continuing disagreements with the Kenyan government, which owns the remaining 30% of Telkom, it was contractually unable to implement any solutions to the operator’s problems without the agreement of its co-shareholder, leading the group to conclude that it had lost control over the entity. ‘Loss of control refers to the fact that Orange considers that it is unable, as a majority shareholder, to take decisions and implement by itself certain solutions to Telkom Kenya’s financial difficulties,’ Business Daily quotes Orange Group press officer Tom Wright as saying. Orange’s investment in Telkom Kenya is therefore now accounted for under the equity method from 31 December 2014, with the firm stating that the change in accounting method has no material impact on the 2014 net income.

Kenya, Orange Group, Telkom Kenya