Safaricom seeks shareholder nod to give Vodafone CEO nomination powers

Safaricom, Kenya’s largest telecommunications company, will ask shareholders to approve a governance overhaul that would give the majority shareholder, Vodafone Kenya Ltd, the power to nominate the chief executive and to remove rules put in place when the Kenyan government was a key shareholder. 

The proposals, seen by TechCabal on Wednesday, will be voted on at Safaricom’s annual general meeting on July 31. The move comes one month after Vodafone Kenya, wholly owned by South Africa’s Vodacom Group Ltd, acquired a 15% stake from the Kenyan government, raising its ownership to 55%. 

If approved, the amendments would mark Safaricom’s first constitutional overhaul since Vodafone Kenya became the company’s majority shareholder. 

The most significant proposal gives Vodafone Kenya the right to nominate Safaricom’s chief executive officer, subject to board approval, for as long as it holds more than 50% of the company’s issued and fully paid share capital. Vodafone Kenya would also nominate all executive directors and shareholder-appointed directors during that period.

“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,” part of the notice reads.

Safaricom is also proposing to replace the 10% and 40% ownership thresholds in its Articles of Association with a single 50% threshold, aligning its constitutional documents with Vodafone Kenya’s new position as the controlling shareholder.

The board is seeking to remove provisions requiring Safaricom to obtain government approval to expand beyond Kenya and Ethiopia. Future expansion would instead be considered through the company’s governance processes, ending a requirement introduced when the government retained significant influence over the listed company.

Other amendments revise the company’s reserved matters, update the definition of Vodafone Kenya and government-appointed directors, and remove provisions that no longer reflect the company’s ownership structure.

The proposals also change how Safaricom’s board operates. They introduce a mechanism for resolving deadlocks between directors, allow directors to attend meetings and vote electronically, broaden the circumstances under which extraordinary general meetings can be convened, and recognise written board resolutions.

Safaricom also wants to remove the requirement that its executive committee is predominantly Kenyan, while retaining the board composition requirements required by Kenyan law. Another amendment removes the obligation to maintain a formal dividend policy, leaving dividend recommendations to the board.

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. The Capital Markets Authority (CMA) exempted Vodafone Kenya from making a mandatory takeover offer, despite its having crossed the 50% ownership threshold.

Following the acquisition and an internal restructuring, Vodafone Kenya, now wholly owned by Vodacom Group, owns a 55% stake in Safaricom. The Kenyan government retains 20%, while public investors hold the remaining 25%.

A petition challenging the government’s sale of the shares remains before the High Court.

Shareholders will also vote on a final dividend of KSh1.15 ($0.01) per share, bringing the total dividend for the year ended March 31, 2026, to KSh2.00 ($0.02) per share if approved. The dividend will be paid on or about August 4 to shareholders on the register as of July 24.

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