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CA Suspends Airtel-Telkom Merger Over Graft Allegations

The Ethics and Anti-Corruption Commission (EACC) is investigating graft allegations against the proposed Airtel-Telkom merger, which has forced the Communication Authority of Kenya (CA) to suspend it.

Prior to the merger proposals, Telkom and the treasury was under investigation on how the government sold part of its stake to French firm Orange. Orange later sold its shares to UK firm Helios Investment, which currently holds 60 percent stake while the Government of Kenya holds 40 percent.

“We have advised the parties that, in light of government shareholding in Telkom Kenya, approval shall only be granted once all the conditions set out by the Authority are fulfilled and the transaction is cleared by EACC,” said Christopher Wambua, CA director in charge of communications and public affairs.

Read: Telkom To Sell Ksh3.8 Billion Properties Ahead Of Airtel Merger

Among those targeted in the graft purge include senior managers at Telkom Kenya, Competition Authority of Kenya (CAK), CA and the Treasury.

On August 14, EACC wrote to CA requesting that the merger process be suspended, until the two investigations were concluded.

“Due to public interest, the commission (EACC) requests that you halt the processof merger pending the ongoing investigations. The commission is investigating an allegation of misappropriation of public funds in the process of recapitalisation and restructuring the balance sheet of Telkom Kenya Limited in 2012 and the current merger of Telkom Kenya with Airtel Kenya,” wrote EACC CEO Twalib Mbarak in the letter as quoted by Business Daily.

Read: 575 Retrenched Telkom Employees To Be Re-interviewed After Merger

Telkom and Airtel announced the merger early this year, in a bid to up competition against market leader, Safaricom.

With the new arrangement, Telkom Kenya’s key shareholder Helios will retain 40 percent, Kenyan Government 10 percent while Bharti Airtel will be the majority shareholder with 50 percent. The new entity will be called Airtel-Telkom.

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Written by Francis Muli

Senior reporter at Kahawa Tungu, Muli has a passion for human interest stories. Believes in unearthing societal rots that have been hidden from the public eye.
Follow me on Twitter @FmuliKE. Email francis@kahawatungu.com

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