South Africa’s Vodacom Group has expanded its representation on Safaricom’s board following its acquisition of the government’s stake. The changes reflect Vodacom’s stronger ownership position after completing the Ksh 204.3 billion transaction.
The deal transferred a 15 percent Safaricom holding from the Kenyan government to Vodacom. It also strengthened the South African company’s control over the Nairobi Securities Exchange listed telecommunications operator.
Vodacom appointed Mariam Cassim and Matimba Mbungela as non executive directors. Cassim serves as Vodacom’s chief executive for financial technology, while Mbungela is its chief human resources officer.
Their appointments increase Vodacom’s board representation from three directors to five. The expanded presence gives the group greater influence over Safaricom’s governance and strategic direction.
The board changes also reduce the government’s representation at Safaricom. John Kipngetich Mosonik has left the board after the State transferred one seat to Vodacom.
Mosonik previously served as Principal Secretary in the State Department for Infrastructure. The government will retain two board seats after its Safaricom ownership falls to 20 percent.
Vodafone Group has also surrendered its direct board seat following the transfer of its remaining Safaricom interest. James Ludlow, Vodafone Group’s reward and policy director of human resources, has exited the board.
He served for two years before Vodafone’s direct ownership ended. Vodacom will now hold all five seats allocated to its shareholder group.
The revised board structure follows a relationship and cooperation agreement between the shareholders. Vodacom chief executive Shameel Joosub previously outlined the planned changes during an investor call.
“It will all become Vodacom,” said Joosub, Vodacom’s chief executive, referring to the group’s board representation. The structure will have five Vodacom directors, two government directors and four independent directors.
Safaricom’s leadership arrangements will also change under the new shareholder agreement. The agreement requires the chief executive to be selected from nominees provided by Vodafone Kenya Limited.
VKL is the holding vehicle through which Vodacom owns its Safaricom interest. This arrangement gives Vodacom a decisive role in selecting the executive who will lead the Kenyan operator.
The agreement also preserves a Kenyan role at the top of Safaricom’s board. Vodafone Group, which owns 65 percent of Vodacom, has committed to influence the selection of a Kenyan chairman.
The National Treasury will also retain a role in appointing the chairman. Vodacom has agreed to seek a Kenyan national for the position.
The ownership changes leave the government with a 20 percent stake in Safaricom. Vodacom paid Ksh 204.3 billion for the 15 percent holding sold by Treasury.
It also paid an upfront dividend of Ksh 40.2 billion on the State’s remaining shares. The amount will be recovered through future dividends payable to the government.
Safaricom will now operate as a Vodacom Group subsidiary under the revised ownership structure. The shareholder agreement requires it to follow Vodacom policies, standards and procedures across several corporate functions.
These areas cover financial reporting, governance, compliance, ethics, risk management, procurement and operations. The changes therefore extend beyond board appointments into the wider governance framework of the telecommunications company.
