CA denies corruption allegations in Essar Telecom Kenya sale

The Communications Authority of Kenya (CA) has dismissed allegations appearing in a section of the media imputing unethical conduct and corruption in the sale of Essar Telecom Kenya and its subsequent acquisition by Safaricom and Airtel.

Addressing a press conference, the CA chairman Ngene Gituku accompanied by the Director General Francis Wangusi recently sought to clear the air over the matter, which they termed as intended to soil the reputation of the Authority.

‘‘It appears that the authors of the malicious reports are hell-bent on soiling the reputation of the Authority, and thereby ultimately discouraging investment in Kenya’s vibrant ICT sector,’’ said Mr. Gituku.

Gituku said all decisions at the Authority are done above board and as a public institution the CA is open to public scrutiny. He advised any aggrieved individual to report to the relevant institutions.

‘‘I urge any ex-board member or any member of the public who has any information on corruption at CA to report the same to the Ethics and Anticorruption Commission and not to rush to the media for public sympathy,’’ added Mr. Gituku.

The chairman said the ICT sector would remain stable under CA’s oversight and will always be guided towards growth and prosperity through fair regulation.

In February 2014, Essar Telecom Kenya – which operates the yu brand – wrote to inform the Authority that they were unable to sustain their operations and were planning to exit the Kenyan market. Essar Telecom indicated that only Safaricom and Airtel Networks had jointly agreed to buy the Essar infrastructure Tier One licence, with its frequencies, and absorb their employees together with their subscribers.

The then CCK Board approved the transaction subject to among other conditions payment of US $5.4 million each for the transfer of Essar Telecom’s mobile network infrastructure Tier One rights to Airtel and its associated frequency spectrum resources to Safaricom.

Airtel and Safaricom also committed to share out Essar Telecom’s employees.

In authorizing the transaction, the then CCK Board considered the implications of Essar Telecom’s liquidation on the mobile operator’s creditors, 150 employees and recovery of the Authority’s debt amounting to Kshs800million.

The CA Board appointed in May 2014, however, resolved, through a majority vote, that Airtel should pay US $27 million for the acquisition of Essar Telecom licence rights, a decision that Airtel threatened to contest in court. The CA Board’s decision for Airtel to pay US $27 million still stands.


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