Airtel-Telkom Merger Suspended Over Alleged Corruption -Reports
The Communications Authority of Kenya has suspended the planned merger of Airtel Kenya and Telkom Kenya pending the result of the investigation by the Ethics and Anti Corruption Commission on how the merger deal was entered into.
Christopher Wambua, the CA Director who is in charge of communications and public affairs, confirmed that the telecommunications regulator had received a letter from EACC requesting that the deal be suspended.
He told Business Daily that the CA had advised the parties that, in light of alleged government shareholding in Telkom Kenya, approval would only be granted once all the necessary were conditions set out by the Authority, and the EACC clears the transaction.
The EACC is currently investigating whether public funds were used when the Cabinet approved a restructuring which saw France Telecom (Orange SA) buy a 51 percent share in Telkom Kenya.
The French multinational later sold its stake to the private equity fund Helios.
Business Daily has reported that the commission is investigating an allegation of misuse of public funds in the process of restructuring and recapitalising the balance sheet of Telkom Kenya Limited in 2012 and in the current merger of Airtel Kenya with Telkom Kenya.
The merger was planned for completion by the end of 2019, and it is expected to boast a share of 33.3 percent against Safaricom, which currently has a larger market share of 64.2%.