CA Suspends Airtel-Telkom Merger Over Pending Corruption Charges

The Communications Authority of Kenya (CA) has suspended the Airtel- Telkom merger over pending corruption charges that Telkom Kenya is facing at the Ethics and Anti-Corruption Commission (EACC).

According to EACC, Telkom Kenya limited is being investigated over allegations of misappropriation of public funds in the process of privatization, recapitalization, and restructuring of balance sheets.

The EACC boss, Twalib Mubarak had sent a letter to the Communications Authority of Kenya (CA) requesting the regulator to stop the merger as EACC was still inquiring how the Airtel-Telkom deal was conceptualized.

Several officials have been summoned for questioning by the commission with most of them being top managers from Telkom Kenya, CA, Competitions Authority of Kenya, and the National Treasury.

The Treasury officials are caught up in the net following a deal in 2012, where the permanent secretary of treasury signed a deal on behalf of the government with Telkom Kenya.

EACC seeks to see several documents that show how Telkom has been running and issuing contracts and failure to submit the documents, the merger will remain at a standstill.

The documents required by EACC include; licenses issued and documents that show how the French company that owns 60 percent of the company’s assets entered into a contract with Telkom. Telkom Kenya’s financial statements, board meetings, contracts, and bids are also part of the requirements.

Telkom Kenya has involved several companies in certain biddings both locally and internationally; Jamhuri Holdings, France Telecom SA, Telkom South Africa, Reliance Communication of India, Lap Green Network, Alcazar Capital Limited, MTNL (India), VSNL Tata (India), and Sudatel (Sudan).

CA said that it would only grant approvals to the merger after the EACC is through with the ongoing investigations.

“We have advised the parties that, in light of government shareholding in Telkom Kenya, approval shall only be granted once all the conditions set out by the Authority are fulfilled and the transaction is cleared by the EACC,” said the CA director in charge of communications and public affairs, Christopher Wambua.

The parastatal has however said that it submitted all documents required by the EACC.

“Telkom has given the EACC all the information that the commission has requested and continues to cooperate with them on the matter,” Telkom said.