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Safaricom Faces Legal Showdown, Compelled to Reveal M-Pesa Firm’s Financial Secrets

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Three M-Pesa account holders seeking to compel Safaricom to disclose the mobile money platform’s financial statements have opposed an application by the telco to suspend their petition, arguing that the matter is of immense public interest.

S. Gichuki Waigwa, Lucy Nzola, and Godfrey Okutoyi sued Safaricom, Vodafone Group Plc, and M-Pesa Holding Company, among others, seeking a raft of declarations, among them an order lifting the corporate veil on Safaricom and its affiliate firms.

The three filed the case on their behalf and that of M-Pesa account holders seeking to compel M-Pesa Holding Company—the firm that holds hundreds of billions of shillings powering the mobile money service—to disclose its annual reports and accounts from the date of its incorporation on September 11, 2006, to date.

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While responding to the application by Safaricom to the High Court, seeking the suspension of the suit and having it referred to arbitration, the three petitioners stated that it would be highly prejudicial to the public interest for the matter to be heard by an arbitrator.

“In any case, there never was and there has never been any agreement between M-Pesa account holders and M-Pesa Holding, and no evidence of any such agreement has been produced,” said Mr Waigwa in an affidavit.

The lawyer said in the application that there is no document signed between M-Pesa account holders and M-Pesa Holding so that the dispute can be handled by an arbitrator as suggested by Safaricom.

“There is also no evidence of any exchange of letters or other communication between M-Pesa account holders and M-Pesa Holding which provide a record of any alleged agreement,” said Mr Waigwa.

Through senior counsel Wilfred Nderitu, the petitioners said the Arbitration Act cannot be invoked in the dispute, given that the suit raises issues of constitutional importance for the High Court to determine.

The application comes weeks after the telco announced that Safaricom had acquired the entire share capital of M-Pesa Holding from Vodafone International Holdings BV.

Safaricom investors voted for a special resolution that approved the transaction.

He said given that the legal position is that the award of an arbitrator is generally final, there would be a serious risk that the petitioners would lose their constitutional right to prefer an Appeal, in case the claim is dismissed.

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“It is therefore just and equitable that the Vodafone Group’s Application be dismissed with costs, and that this Honourable Court confirms that the service effected upon it was factually and legally valid to all intents and purposes,” Mr Waigwa said.

“On 17th April 2023, Safaricom entered into a share purchase agreement with Vodafone International Holdings B.V. for the transfer of one hundred percent shareholding in M-Pesa Co. Ltd from Vodafone BV to Safaricom,” the telco said in a statement on October 19.

Mr Waigwa has pointed out in the affidavit that the public announcement regarding the completion of its acquisition raises eyebrows considering that it was allegedly acquired for $1 only

Samuel Musila
Samuel Musila
Passionate Software Developer and Tech content creator From Nairobi, Kenya

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