The Communications Authority of Kenya has dismissed claims that it unethically and in a corrupt way influenced the sale of YuMobile (Essar Telcom) to both Safaricom and Airtel.
CA was responding to allegations made by a former member of its board who went to media with the claims of corruption in the board but CA says the allegations were malicious and intended to soil the reputation of the Authority.
CA chairman Ngene Gituku said, ‘‘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. 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.’’
Accompanied by the Director General Mr. Francis Wangusi, 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 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 USD 5.4million 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 USD27million 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 USD27million still stands.