Helios Investment Ltd is set to refund the Kenyan government Ksh6.09 billion following a surprise move by the Cabinet to cancel a 60 percent stake in Telkom that the London-based PE fund had sold to the State on the eve of the election last year.

The Cabinet’s dispatch outlined its new approach, stating that the government would now seek a refund of the entire amount from Jamhuri Holdings and Helios Investment Limited, the parties involved in the buyout deal.

The Cabinet poses for a photo at the Kakamega State Lodge. Photo (PPS).
The Cabinet poses for a photo at the Kakamega State Lodge. Photo (PPS).

The government has at the same time given Telkom a green light to scout for a new investor after pulling out of the initial deal that was overseen by the previous regime.

The decision to pull out was reached on Tuesday during a cabinet meeting chaired by President William Ruto at State House Nairobi.

“In an effort to address governance challenges arising from the nationalisation of Telkom Kenya Limited in the lead-up to last year’s general election, the Cabinet has decided to rescind the government’s plan to purchase 60 percent of Telkom Kenya’s ordinary shares from Jamhuri/Helios,” read the dispatch

“As a result of this decision, Jamhuri/Helios will be required to refund the government the entire amount paid for the takeover.”

The deal between the government and Helios was reached shortly before the August 2022 election, a transaction that would later be questioned by the Ruto administration.

The Cabinet emphasised that its intervention aims to offer Telkom Kenya an opportunity to explore and bring on board another strategic investor, subject to obtaining all necessary regulatory approvals.

This strategic shift is expected to enhance Telkom Kenya’s operational capacity, positioning it as a more competitive player in the telecommunications market.

The controversy surrounding the Telkom Kenya buyout took an unexpected turn when former Treasury Cabinet Secretary Ukur Yatani appeared before a parliamentary committee probing the deal.

Mr Yatani disclosed that the government was, in fact, the majority shareholder in Telkom Kenya, contrary to previous claims that it had paid for the shares from Helios Limited.

However, Yatani pointed out that the shareholding status had not been officially updated at the State law office at the time due to issues with the constitution of the Telkom Kenya board responsible for initiating the changes.

He further explained that the payment had been approved following a meeting by the National Security Advisory Council.