- MPs launched an inquiry into the buyback after Nyakangó claimed National Treasury overruled her in the transaction.
- On Wednesday, Muia told the joint committee Telkom Kenya will pay back the government the money once its financial status improves.
Image: FILE
The controversy surrounding the government’s Sh6.09 billion buyback of Telkom Kenya took a new twist after former National Treasury PS Julius Muia told MPs the deal was lawful.
Muia contradicted Controller of Budget Margaret Nyakangó, who had earlier on told legislators the National Treasury overruled her in the transaction.
The former PS told a joint sitting of the Departmental Committee on Finance and National Planning and the Departmental Committee on Communication Information and Innovation on Wednesday that the deal was in compliance with the Constitution.
“The National Treasury complied with all requirements. The payment was lawful and it was in the interest of the Kenyan people,” he said.
MPs launched an inquiry into the buyback after Nyakangó claimed National Treasury overruled her in the transaction.
The government paid Sh6.09 billion to acquire a 60 per cent stake in Telkom Kenya from a UK-based private equity fund, just four days before last year’s general election.
The CoB must approve the withdrawal of cash from the government’s main accounts and has powers to block access to funds suspected to breach the law.
Article 223 of the Constitution also allows the Treasury to spend on emergencies without the approval of Parliament.
The law demands that the Treasury table a mini-budget two months after withdrawing funds from the Consolidated Fund without the approval of MPs.
On February 14, Nyakang’o told MPs that she refused to authorise the withdrawal of the billions to buy out Helios Investment Partners in Telkom Kenya in a deal that made the company fully state-owned.
“I rejected some of the withdrawals including the Sh6,091,140,702 that was funding to cater for the exit of Helios Investment in Telkom Kenya Limited. And this was in writing,” Nyakang’o told MPs.
The Treasury withdrew Sh6.09 billion on August 5, 2022, and paid Jamhuri Holdings Limited, a Mauritius-based subsidiary of Helios in a transaction that lacked parliamentary approval.
On Wednesday, Muia told the joint committee Telkom Kenya will pay back the government the money once its financial status improves.
The former PS said he received a letter from the Executive Office of the President on April 8, 2022, saying the National Security Advisory Council had okayed the exiting of Helios and the government was to take over the firm.
He noted that the National Treasury then granted approval of the deal and okayed payments on July 28, 2022.
“Approval was used by the National Treasury to request the ex-chequer for payment and also request the Controller of Budget to approve withdrawal,” he said.
He claimed the CoB granted approval on August 3, 2022.
“On August, the Central Bank of Kenya credited the National Treasury account for payment to Jamhuri Holdings and on September 2, the expenditure was reported to Parliament,” he added.
Dagoretti South MP John Kiarie wondered why the National Treasury chose to ignore the regulator—Communications Authority and Telkom management in the deal.
“Do you think there was such a big security risk to by-pass many steps,” he posed.