Finance & Communication Committees Meet More Parties On The Telkom Buyback Probe
Dr Joseph Kinyua taking oath yesterday
By Our Reporter
Worth Noting:
- “The Cabinet Secretary in the National Treasury is the legally recognized custodian of government assets and the only one who can transact on behalf of the government. Anybody else does not have the authority but can advise the CS. My role was to assist the CS to implement the decision of the National Security Council when the decision was made to buy back the Telkom shares from Jamhuri Holdings at 1 Kenya shilling”, he explained.
- The committee also questioned the former Head of Public Service and Secretary to the Cabinet, Dr. Joseph Kinyua, on several issues including how Helios Investment Partners through Jamhuri Holdings Limited became a majority shareholder in Telkom Kenya.
The Telkom buyback probe continued yesterday with three more witnesses taking the witness stand to give evidence on the transaction.
Engineer Stanley Kamau, the former Director-General, Public Investment Portfolio Management, was the first to appear before the Joint-Committee comprising of the Departmental Committees on Finance and National Planning and Communication, Information and Innovation, which is undertaking the inquiry.
Yesterday’s session was moderated by the Chairperson of the Finance and National Planning Committee, Kuria Kimani from Molo constituency.
The former official told the committee that he was not involved in the negotiations, contrary to Mr. John Ngumi‘s assertions when he appeared before the committee on Wednesday. Mr. Ngumu had in his evidence had told the legislators that Eng. Kamau was present during the negotiations.
In his defence, Eng. Kamau said he had never met Mr. Ngumi.
The committee had sought Eng. Kamau’s response on what role he had played in the transaction, in his capacity as an investment advisor to the CS.
“The Cabinet Secretary in the National Treasury is the legally recognized custodian of government assets and the only one who can transact on behalf of the government. Anybody else does not have the authority but can advise the CS. My role was to assist the CS to implement the decision of the National Security Council when the decision was made to buy back the Telkom shares from Jamhuri Holdings at 1 Kenya shilling”, he explained.
The committee also questioned the former Head of Public Service and Secretary to the Cabinet, Dr. Joseph Kinyua, on several issues including how Helios Investment Partners through Jamhuri Holdings Limited became a majority shareholder in Telkom Kenya.
He recounted to the legislators the history of Telkom Kenya shareholding transactions dating back to 2007.
“In 2007, the government sold 51 percent of it’s shares in Telkom Kenya Limited to Orange East Africa. In 2012, the two shareholders decided to restructure the balance sheet which was carrying debts to shareholders amounting to KSh50.9 billion. This led to Orange East Africa writing off KSh33.5 billion and converting the balance of KSh10.5 billion into equity, while the Government of Kenya converted their entire KSh6.9 billion debt into equity.” he told the committee.
Dr. Kinyua further explained that following the restructuring of it’s balance-sheet and with the government’s concurrence to be diluted given that Orange East Africa had agreed to write off its loans, Telkom Kenya’s shareholding changed to 70% for Orange East Africa and 30% for the Government of Kenya.
“It is after this that in 2016, Helios Investment Limited was actualized with government’s approval, on condition that 10 percent of Orange East Africa shares would be transferred to the Government of Kenya at a peppercorn price of KSh1. With this development, the ownership of Telkom Kenya changed to Helios/Jamhuri Holdings at 60 percent; and Government of Kenya at 40 percent,” said Dr. Kinyua.
The former long serving government official affirmed that he was privy to all the transactions because in his capacity as Secretary to the Cabinet, he would prepare minutes and summaries arising from the Cabinet papers presented to the Cabinet on that matter.
The Chair of Finance Committee also sought Dr. Kinyua’s view on what can be done to Kenya’s parastatals to bring them back to profitability.
“It is important to ensure that those engaged to manage these organizations are competent in running the business concerned and can uphold high levels of integrity and good governance,” said Dr. Kinyua.
The committee also heard from Mr. Ben Roberts, the Group Chief Technology and Innovation Officer for Liquid Intelligent Technologies on his capacity as an expert and player in the telecommunication sector.
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