Lack of transparency in a previous deal comes back to haunt Airtel Telkom merger

September 3, 2019 Newsroom

The planned Airtel Telkom merger has now been put on freeze after anti-corruption sleuths opened a probe into allegations of misappropriation of public funds in the process of the recapitalization and restructuring of the balance sheet of Telkom Kenya Limited, in 2012.

The Communications Authority of Kenya (CA) issued a Gazette Notice, asking any parties opposed to the intended merger make their submissions within 30 days, which lapsed on Monday, August 12, 2019.

Several parties have come out expressing concerns which show that the Airtel Telkom merger deal was shrouded in secrecy and that stakeholders were left in the dark on how some of their issues will be handled.

Safaricom is also said to have written a letter to CA raising some concerns it wants addressed before the merger gets approval.

But while Telkom Kenya Managing Director Mr. Mugo has gone on to accuse Safaricom of sabotage, it is his own own employees who are opposed to the merger with Airtel.

The merger has also been dogged by up to Sh8.2 billion claims from former workers who want to be paid their dues before the merger is reached.

Fifty-two former Airtel employees wrote to the Communications Authority of Kenya (CA) seeking reassurance they will get a Sh1 billion settlement should they win the labor dispute in which they claim they were wrongly sacked in January 2016.

Telkom Kenya which retrenched more than 2,600 employees may also be forced to meet dues claimed by the employees in a Sh7.2 billion case which the former employees won in 2017.

Now, Telkom-Kenya Managing Director Mugo Kibati says that the 575 workers who had been declared redundant at the end of July may as well be out of a job.

Telkom had said it would give some of them an opportunity to work with the merged unit and unnamed outsourced partners but now says the offer may be off the table as the merger is frozen leaving their future in limbo.

“This integral component of the Transaction now also leaves the future of our staff and their dependents hanging precariously in the balance, with a further possibility of the loss of jobs,” Kibati said.

Then there is the matter of costs, a local daily revealed that Telkom had put 17.8 acres spread across the country up for sale for Sh3.879 billion which was meant to fund the merger.

No disclosures have been made as to how much the merger will costs and if the firm will get value for money having the properties listed by a limited number of agents and the valuations predetermined.