By PPT
Worth Noting:
- Mucheru explained to the Members of Parliament that although he was not privy to other dealings within the telco, he was aware that the government was buying the JHL stake at 1 USD, while the Kshs.6.09b under probe was meant for repayment of a loan advanced to Telkom Kenya by JHL.
- “I understand that the Kshs. 6.09 billion was meant to repay a loan advanced to Telkom by JHL”, he told the MPs. Telkom Kenya previously was owned 60% by Jamhuri Holdings and thus was not a parastatal under the Ministry”, he added.
The former Cabinet Secretary for ICT, Mr. Joe Mucheru has denied playing any role in the acquisition of Jamhuri Holdings Limited (JHL) stake in Telkom Kenya by the government. He told the Committee that since 60% of Telkom Kenya stake was owned by JHL, his ministry had no role in the transaction.
“I had no role in the acquisition. My understanding is that JHL was acquiring shares from Orange Group who were exiting the Kenyan market and that this was a shareholder transaction in which the National Treasury/Investment Secretary was responsible on behalf of the Kenyan government,” Stated Mucheru.
In his response to questions raised by the Committee, the former CS revealed that he had earlier written to the former Head of Public Service stating the error in the Executive Order placing the company under the State Department of Broadcasting and Telecommunications.
Mucheru explained to the Members of Parliament that although he was not privy to other dealings within the telco, he was aware that the government was buying the JHL stake at 1 USD, while the Kshs.6.09b under probe was meant for repayment of a loan advanced to Telkom Kenya by JHL.
“I understand that the Kshs. 6.09 billion was meant to repay a loan advanced to Telkom by JHL”, he told the MPs. Telkom Kenya previously was owned 60% by Jamhuri Holdings and thus was not a parastatal under the Ministry”, he added.
Asked if he was aware why the National Security Advisory Committee had rejected the merger deal between Airtel Mobile Business and Telkom Kenya, the former CS told the lawmakers that he was not privy to the proceedings of the Committee, but would occasionally be invited to its meetings to make submissions on his area of expertise.
“I was not a member of the National Security Council or the National Security Advisory Committee and therefore was not privy to their deliberations except when I would occasionally get invited”, he submitted.
The Members also sought to get information on how Helios Investment Partners through JHL become a majority shareholder in Telkom Kenya, and the former CS told the joint Committees’ sitting that since he was no longer in government, he was unable to access such information.
“I am no longer a Cabinet Secretary and as such, I no longer have access to government documents and can only refer the Committee to the current office bearers to produce the said documents”, he responded.
This, a statement that the legislators termed as evasive of critical responsibility he held at the time, as he was in a position to advise the government against the acquisition.
In his witness statement, Mucheru acknowledged that the telco is a valuable and important asset for Kenya especially the strategic assets it holds including the National Fibre Backbone, spectrum for mobile and data Communications, thus its strategic that the Government deemed it fit to fully own it.
Asked to provide information on how Helios Investment Partners through Jamhuri Holdings Limited became a majority shareholder in Telkom Kenya and value of the initial (60% controlling) shareholding and subsequent offloading of 10% shareholding to the government of Kenya by JHL, he noted that he did not access to the said document, therefore could not give answers.
The former CS however admitted that he was aware of the intended merger of Airtel Mobile business and that of Telkom Kenya, and that JHL was willing to cede some shareholding in order to give the government a more strategic position (49%) in the merged entity. He revealed that JHL was offloading its stake in preparation to participate in the Airtel Africa IPO/ Listing in London. The merger deal was however rejected by the National Security Advisory Committee.
“In my opinion, the buyback was value for money now that the government owns 100% of Telkom Kenya shareholding.” Stated Mucheru.
The Former CS also told the lawmakers that with transaction reverting the 100% stake to the government, the government could take advantage and turn around the telco to profitability.
“The government has already paid for the connectivity of the fibre cabre. It is unfortunate that while all government agencies spend lots of money paying the private sector for provision of connectivity, Telkom has the capacity to offer this support to all these agencies and in turn support Telkom back to profitability”, he held.
Mucheru also avered that the government should secure its security interests by supporting Telkom Kenya, noting that the government cannot afford to privatize give communications infrastructure for security reasons.
