Kenya’s telecommunications market leader, Safaricom, is preparing to pitch a sweeping constitutional restructuring to its investors.
Safaricom, Kenya’s leading telecom operator, is seeking shareholder approval for a major governance restructure that would grant its majority stakeholder Vodafone Kenya Ltd the exclusive power to appoint the chief executive. The proposed changes would also dismantle regulatory clauses established when the Kenyan government held a pivotal stake in the company.
According to proposals reviewed by TechCabal on Wednesday, the changes will be put to a vote during Safaricom’s annual general meeting on July 31. This strategic shift follows Vodafone Kenya’s recent acquisition of an additional 15% stake from the Kenyan government, a transaction that lifted the Vodacom Group subsidiary’s total ownership to 55%.
If approved, these amendments would mark Safaricom’s first constitutional overhaul since Vodafone Kenya took majority control of the company.
The most significant proposal grants Vodafone Kenya the exclusive right to nominate Safaricom’s chief executive officer subject to board approval for as long as it holds over 50% of the company’s issued and fully paid share capital. Under the same condition, Vodafone Kenya would also retain the power to nominate all executive and shareholder-appointed directors.
“For as long as VKL holds more than 50% of the nominal value of the issued and fully paid share capital of the Company, excluding any shares hereafter issued pursuant to any share issuance in terms of Article 13/c, the Chief Financial Officer of the Company from time to time shall be the alternate director to the Chief Executive Officer,” the notice outlines.
Additionally, Safaricom plans to scrap the previous 10% and 40% ownership benchmarks in its Articles of Association, replacing them with a single 50% threshold to reflect Vodafone Kenya’s new status as the absolute controlling shareholder.
The board is also seeking to eliminate provisions that require Safaricom to obtain Kenyan government approval before expanding its operations beyond Kenya and Ethiopia. Under the new terms, future international expansions would be evaluated strictly through the company’s internal governance processes, effectively dismantling a regulatory hurdle introduced when the state held a dominant stake in the telecom giant.
Further amendments look to revise the company’s reserved matters, update the definitions governing Vodafone Kenya and government-appointed directors, and strip out legacy clauses that no longer align with the company’s current ownership structure.
The proposals also aim to modernize Safaricom’s board operations. They introduce a formal deadlock-resolution mechanism for directors, authorize electronic attendance and voting at board meetings, broaden the criteria for convening extraordinary general meetings, and grant formal recognition to written board resolutions.
Furthermore, Safaricom is looking to remove the requirement that its executive committee must be predominantly Kenyan while still maintaining the mandatory board composition standards required by Kenyan law. Another key amendment seeks to scrap the obligation to uphold a formal dividend policy shifting the authority for all future dividend recommendations directly to the board’s discretion.
The governance changes follow the completion of the government’s stake sale on June 30 after the Court of Appeal lifted conservatory orders that had temporarily halted the transaction. Additionally, the Capital Markets Authority (CMA) exempted Vodafone Kenya from making a mandatory takeover offer despite its stake crossing the 50% ownership threshold.
Following the acquisition and subsequent internal restructuring, Vodafone Kenya now wholly owned by Vodacom Group holds a controlling 55% stake in Safaricom. The Kenyan government retains a 20% shareholding, while public investors hold the remaining 25%. Meanwhile, a legal petition challenging the state’s divestment remains pending before the High Court.
Shareholders will also vote on a final dividend of KSh1.15 ($0.01) per share. If approved, this will bring the total dividend for the financial year ended March 31, 2026, to KSh2.00 ($0.02) per share. The dividend payout is scheduled for on or about August 4 to shareholders registered on the company books as of July 24.
