Investigations by the Ethics and Anti-Corruption Commission on the Airtel-Telkom merger could stall the deal. On August 14, EACC sent a letter to CA requesting suspension of the deal to allow inquiry into the transaction.
On 26th August, Communication Authority of Kenya (CA) informed Airtel and Telkom that it had halted the deal to allow for the probe.
EACC is also interrogating an earlier transaction by Telkom Kenya. The agency is keen on the matter due to the government’s shareholding in Telkom Kenya.
In 2012, a restructuring and financing plan at the telecommunication firm saw treasury loans converted into equity.
The anti-corruption body will probe all allegations of resource mismanagement during the restructuring process and how the deal was arrived at.
France Telecom acquired a 60 percent stake in Telkom Kenya in two separate deals in 2007 and 2013.
The French firm later sold the stake to Helios Capital making Telkom Kenya 40% owned by the treasury and 60% by PE firm Helios.
The anti-corruption body is investigating the transactions and its focus is on senior officials at Telkom Kenya, the Communication Authority, and the Treasury.
Airtel and Telkom also face lawsuits from former employees, a matter that may delay the union between the two telcos. For instance, fifty-two former Airtel employees are claiming KSh1 billion for wrongful termination in 2016. On the other hand, Telkom will be forced to meet dues amounting to billions of shillings awarded to retrenched employees by the labor court in 2017.
