Former National Treasury official Engineer Stanley Kamau on Thursday, April 20, refuted claims of his involvement in the Telkom Kenya buyback negotiations valued at Ksh6 billion.
Kamau told the Departmental Committee on Finance and National Planning and the Departmental Committee on Communication Information and Innovation that he had never met John Ngumi, who reportedly pocketed Ksh415 million from the deal for his role as the advisor.
Kamau's statement contradicted Ngumi ‘s assertions, who had told the legislators that Kamau was present during the deal's negotiations when he appeared before the same committees on Wednesday, April 19.
The engineer maintained that he only advised the occupant of the National Treasury Cabinet Secretary position and that the final decision to approve or decline the deal lay with the CS.
"The Cabinet Secretary in the National Treasury is the legally recognised 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 Ksh1”, he explained.
Ngumi, on Wednesday, April 19, revealed that he was paid Ksh415 million for advising the government during the acquisition of Telkom Kenya Limited.
The advisor received the amount over five months, between April 1, 2022, when the government began the acquisition of Telkom Kenya Limited, and September 2022, when the deal was concluded.
Joseph Kinyua grilling
Former Head of Public Service and Secretary to the Cabinet, Dr Francis Kinyua, was also grilled over the Telkom saga on the same day.
The former Head of Public Service told the committee that the officials involved in the Telkom deal were drawn from the National Treasury.
He recounted to the legislators the history of Telkom Kenya's shareholding transactions dating back to 2007.
"In 2007, the government sold 51 per cent of its shares in Telkom Kenya Limited to Orange East Africa. In 2012, the two shareholders decided to restructure the balance sheet, which carried 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 its entire Ksh6.9 billion debt into equity," he told the Committee.
The Committee questioned Kinyua on several issues, including how Helios Investment Partners, through Jamhuri Holdings Limited, became a majority shareholder in Telkom Kenya.
Kinyua explained that after restructuring its 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 the government's approval, on condition that 10 per cent 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," Kinyua told the committee.
The former Head of Public Service failed to reveal the names of individuals behind the controversial Ksh6.09 billion Telkom Kenya buyback.
He explained that the National Treasury undertook the transaction. Still, he noted that officials from the Office of the Attorney General and the Ministry of Information and Communication could provide more details.
The government paid Ksh6.09 billion to acquire a 60 per cent stake in Telkom Kenya from a UK-based private equity fund, a few days before the 2022 General Election, without parliamentary approval.
Kinyua told the Committee that his role in the deal was limited to preparing minutes of discussions in the Cabinet.
