Vodacom Group has expressed confidence in overturning a Kenyan court ruling that ordered the company to return a 15 percent stake in Safaricom to the government. The ruling was made in September, citing that the transaction had not adequately involved the public and that material information had been concealed. Both Vodacom and the Kenyan government have appealed against the decision.
The dispute began when Vodacom increased its stake in Safaricom, Kenya's largest mobile network operator, from 40 percent to 55 percent in a $1.6 billion transaction completed in June 2026. This investment has driven a 25.7 percent increase in Vodacom's headline earnings per share. For the six months ended September 30, 2026, Vodacom's headline earnings per share rose to 5.87 rand from 4.67 rand in the corresponding period last year.
Vodacom chief executive Shameel Joosub stated that the company remained confident of winning its appeal, maintaining that the transaction had followed the required procedures. The Court of Appeal in Nairobi is fast-tracking the case and has directed that the existing position be maintained pending its decision. This means Vodacom remains the registered holder of the shares in question.
The investment in Safaricom has been strategically important for Vodacom, giving the company majority ownership of Safaricom, which operates the most mature and profitable market for M-Pesa, the mobile money service launched in Kenya in 2007. Vodacom is seeking to expand financial services, including lending, investments, and merchant payments, across its markets.
The growth of Vodacom's financial performance has been supported by Safaricom, whose contribution helped strengthen the group's earnings. For the six months ended September 30, 2026, Vodacom's service revenue increased 29 percent to 85.1 billion rand ($5.2 billion), while financial services revenue nearly doubled, rising 99 percent to 15.9 billion rand.
Vodacom processes transactions worth $575 billion and is looking to replicate M-Pesa's success in Kenya and Tanzania in other African markets. In South Africa, the company is also monitoring regulatory reforms that could allow non-bank institutions to accept deposits. The company aims to expand its presence in mobile financial services.
The outcome of the appeal will have significant implications for Vodacom's operations in Kenya and its expansion plans in the region. The company's confidence in winning the appeal is based on its assertion that the transaction followed the required procedures. The Court of Appeal's decision is pending, and Vodacom remains the registered holder of the shares in question.
Key points
- Vodacom Group confident of winning appeal on Kenyan court ruling ordering return of 15% stake in Safaricom
- Investment in Safaricom drove 25.7 percent increase in Vodacom's headline earnings per share
- Vodacom seeks to expand financial services, including lending, investments, and merchant payments, across its markets
