Vodacom Group has confirmed that it remains the registered owner of its 55 per cent stake in Safaricom, despite an ongoing legal challenge to its $1.6 billion acquisition of additional shares in the Kenyan telecommunications company.
The ownership dispute remains before Kenya’s Court of Appeal, which has directed the parties to maintain the current arrangement until the case is determined. This means Vodacom continues to hold the shares it acquired from the Kenyan government in June.
In its interim financial results for the six months ended September 30, released on November 10, Vodacom said the court order had preserved the existing ownership position while the appeal proceeds.
The legal battle began after Kenya’s High Court ruled that the acquisition of the government’s 15 per cent stake in Safaricom was null and void. The court raised concerns about the lack of adequate public participation and the failure to disclose important information relating to the transaction. Both Vodacom and the Kenyan government have challenged the ruling.
Before the acquisition, Vodacom held a 35 per cent interest in Safaricom. The purchase increased its stake to 55 per cent, giving the South African telecommunications group a controlling interest in Kenya’s largest mobile network operator.
Vodacom Chief Executive Officer Shameel Joosub described the transaction as a major milestone for the company, saying it would strengthen earnings, increase its presence in attractive African markets and expand the contribution of financial services and digital businesses to the group.
The latest financial results also highlight the growing importance of Safaricom to Vodacom’s wider business strategy.
For the six month period, group revenue increased by 25.6 per cent to R102.5 billion, while revenue from financial services nearly doubled, rising 99 per cent to R15.9 billion.
On a pro forma basis, which assumes Safaricom had been part of the group throughout the corresponding period last year, financial services revenue recorded growth of 19.2 per cent.
Vodacom also reported 108 million financial services customers, reflecting the increasing role of mobile money, digital payments and other financial products in its operations.
Safaricom’s M Pesa platform is a major part of this growth. Initially introduced as a mobile money transfer service, it has developed into a wider financial network that supports merchant payments, everyday transactions, savings, credit facilities and business services.
With majority ownership of Safaricom, Vodacom has greater influence over the direction of one of Africa’s most established mobile financial services platforms. The arrangement also creates opportunities to strengthen digital financial products and payment services across its other African markets.
The group has been working to expand the reach of M Pesa beyond Kenya and Tanzania, with particular interest in services such as digital lending, merchant payments and other financial products.
However, the ongoing court case raises questions about the long term ownership structure of Safaricom and how far the two companies can deepen their business integration while the legal dispute remains unresolved.
For now, Vodacom’s position as the registered holder of the 55 per cent stake remains unchanged. The Court of Appeal’s eventual decision will determine whether the acquisition of the Kenyan government’s 15 per cent holding can legally stand.
The outcome is also important for the Kenyan government, which retains an interest in Safaricom. Beyond the ownership dispute, the case has implications for public investment, corporate governance and the future direction of one of the country’s most important companies.
Vodacom has not indicated that the legal proceedings have disrupted Safaricom’s day to day operations. The central issue remains the legal validity of the share acquisition and the long term implications for control of the company.
Attention will also be on whether the ongoing dispute affects major investment decisions, particularly those involving M Pesa, technology integration and the expansion of regional payment services.
Vodacom and Safaricom will need to provide clarity on which strategic projects can continue under the current ownership arrangement and whether any major decisions will have to wait until the court delivers its final ruling.
