Kenya’s anti-graft Ethics and Anti-Corruption Commission (EACC) has suspended a planned merger of Telkom Kenya and Airtel Kenya, pending a probe into misappropriation of funds at Telkom, a spokesman said.
EACC spokesman Yassin Amaro said in Nairobi, that there was the need to investigate allegations of misappropriation of public funds and to safeguard the interest of taxpayers.
“They are conducting investigations into allegations of misappropriation of public funds in the process of privatisation, recapitalisation and restructuring of balance sheets of Telkom Kenya limited.
“We are interested on how this public entity is enjoining the other private party and how it is safeguarding the interest of taxpayers,” Amaro said.
India’s Bharti Airtel had said in February its unit Airtel Networks, Kenya Ltd, had agreed to merge with Telkom Kenya Ltd, the East African nation’s smallest telecom operator.
Three industry sources told Reuters in January that Bharti Airtel was in talks to buy Telkom Kenya to create a stronger challenger to market leader Safaricom.
Neither Telkom nor Airtel were immediately available to comment.
Telkom was privatised in 2007 when French telecoms operator Orange bought a majority stake, which was subsequently sold to Helios in 2015.
Amaro added that the investigation was restricted to Telkom Kenya and did not give a timeframe on when investigations would be completed.
At the time the deal was announced, Airtel said the deal would not involve Telkom Kenya’s extensive real estate holdings and some government contracts for unspecified services.
No timeframe however, had been given for the deal, and both companies were expected to operate as normal until the transaction is completed.