Telkom sale hands over national security intelligence to foreigners


The Privatisation of Telkom Kenya Ltd may have handed over the national security intelligence to the hands of foreigners.

The telecommunications company provides the infrastructural hotlines to critical government installations including the Office of the President, Defence ministry, National Intelligence Service, police and other key agencies.

In 2007, France Telecom in consortium with Alcazar Capital Ltd, through Orange East Africa Ltd, presented the highest financial bid of $390 million and was awarded the tender to purchase 51 per cent shares of the company.

However, with the government shareholding decreasing from 49 per cent to 30 per cent in 2012 at a cost of a meager Sh2.4 billion, the country’s national security system is in the danger of infiltrations from foreign interest denting its sovereignty.

“Where are we as a country? Who controls the hotlines, a key component of Telkom Kenya Ltd? Our infrastructure is now in the hands of foreign interests and this impinges negatively on our sovereignty,” said a security expert who did not want to be named.

A recent special report of the National Assembly Public Investments Committee on the privatisation, recapitalisation and restructuring of Telkom Kenya, recommends that the government retains its 49 per cent shareholding due to strategic consideration and national security concerns.

It wants the government to relook at the policy on privatisation of key and strategic public investments to ensure that public interest is fully protected at all times.

“While privatisation is important, there is a need for a joint effort by the ministries to protect strategic government infrastructure,” said the report by the committee chaired by Eldas MP Adan Keynan.

The report was tabled in the House on Tuesday and is awaiting adoption or rejection.

It advises Information Secretary Fred Matiang’i to terminate the contract under which TKL manages a state-owned National Fibre Network to protect public interest concerns and the future of ICT in Kenya.

Under an existing agreement, TKL was allowed to manage 5,000km of fibre optic cable that was installed using government funds.

The PS Information, Communication and Technology and Treasury who sit as directors in the board of TKL have been faulted by the committee for abetting an illegality.

This is informed by the findings that the Privatization Act was violated when the dilution of government shareholding occurred.

The Communications Commission of Kenya now the Communications Authority of Kenya and the attorney general were never consulted in the process contrary to the law.

“The government never sought CCK’s approval when it was ceding further shares in TKL. This ceding was in breach of license provisions, therefore illegal. The PSs who sit in the board of TKL on behalf of the government should be held responsible for contravening the license granted by the regulator to TKL,” the report says.

If the report is adopted by the House, Telkom Kenya Limited could be operating in the country illegally for breaching its practicing license. The license directs notification to the market regulator of any shift in share proportion.

One of the license conditions is that the licensee shall notify the CCK of a change in proportion of shareholding.


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