The Cabinet has rescinded the controversial nationalisation of Telkom Kenya and directed the seller to refund the money.
The resolution was reached on Tuesday at a Cabinet meeting chaired by President William Ruto.
"By dint of this decision by Cabinet, Jamhuri/Helios will refund to the Government of Kenya the amount paid as consideration for the takeover," a dispatch from State House said.
The Cabinet said the decision is part of government's move to address governance challenges posed by the nationalisation of the telco.
The buyout deal was entered four days before the August 9, 2022, elections where the government bought 60 per cent of the ordinary shares of Telkom Kenya held by UK-based Helios Investors LLP and its Mauritius-based subsidiary, Jamhuri Holdings Limited, at a cost of Sh6.09 billion.
The deal, however, raised controversy after it emerged that the National Treasury overruled the Controller of Budget and bought out Helios Investment's stake in Telkom Kenya Ltd in a transaction that lacked parliamentary approval.
Controller of Budget Margaret Nyakang’o told Parliament’s Budget and Appropriations Committee (BAC) on February 14 that she refused to authorise the withdrawal of Sh6,091,140,702 to cater for the exit of Helios Investment in Telkom Kenya Ltd.
"And this was in writing,” Nyakang'o told MPs.
Article 223 of the Constitution allows the National Treasury to spend on emergencies without the approval of Parliament.
All it is required to do is to table a mini-budget two months after withdrawing funds from the Consolidated Fund without the approval of MPs.
However, the Controller of Budget must approve the withdrawal of cash from the government’s main accounts and has powers to block access to funds suspected to be in breach of the law.
The Cabinet in its resolution said the revocation of the Telkom Kenya buyout now paves the way for the transaction to be conducted by following due diligence.
"The decision by Cabinet offers Telkom Kenya an opportunity to source and onboard another strategic investor, subject to the receipt of all regulatory approvals," the dispatch said.
"Cabinet’s intervention will enhance the operational capacity of Telkom Kenya and make it a competitive player in the telecommunications market," the Cabinet resolved.