Vodacom can now name Safaricom’s CEO shortlist after shareholders rewrite the rules

Safaricom shareholders on Friday approved special resolutions that rewrite the company’s Articles of Association to match its new ownership. Vodafone Kenya Limited, the holding company through which South Africa’s Vodacom owns its stake, tabled fourteen of them.

The Articles of Association are a company’s internal rulebook. They set out who sits on the board, how the chief executive is chosen, and which decisions need more than a simple majority. Changing them is not routine. Under Kenya’s Companies Act it takes a special resolution, and Vodafone Kenya used a shareholder’s power under Section 312 to put these on the agenda itself.

Why the vote was never really in doubt

Each resolution was voted on separately by poll at the Annual General Meeting on 31 July. A special resolution needs at least 75% of the votes actually cast at the meeting.

Vodafone Kenya holds 54.94% of Safaricom. The National Treasury holds 20%. Together that is 74.93% of the share register, a fraction under 75%. Because turnout at any AGM is never complete, their combined holding sits comfortably above 75% of any realistic vote. The two of them could carry the resolutions without a single other shareholder joining in.

Safaricom’s board took no position on any of them. It went further than that. The directors told shareholders they were making no representation that the resolutions comply with the Companies Act, the corporate governance code for listed companies, or the Nairobi Securities Exchange listing rules. The board also disclosed that some directors are nominees of Vodafone Kenya or the Government and had an interest in the outcome. Both shareholders were still entitled to vote.

A board declining to recommend a controlling shareholder’s resolutions is ordinary. A board declining to say whether they are lawful is not, and it left the 25% held by the public to work that out on their own.

How Safaricom got here

On 30 June 2026, the Government of Kenya sold a 15% stake in Safaricom to Vodafone Kenya in a single block trade on the Nairobi Securities Exchange, 6,009,814,200 shares at KES 34 each, or about KES 204.3 billion. On the same day, Vodacom bought out Vodafone Group’s remaining 12.5% of Vodafone Kenya and took full ownership of that vehicle. We covered the completion of that deal, and before that the full structure of the transaction and the court freeze that stalled it into mid-2026.

Vodacom now controls about 55% of Safaricom. The Treasury holds 20%, down from 35%. Public investors hold the remaining 25%. Friday’s vote takes that share register and converts it into governance rights written into the company’s constitution.

Who picks the next chief executive

For as long as Vodafone Kenya holds more than 50% of Safaricom, the board must appoint the chief executive from a list of nominees Vodafone Kenya submits. The board still makes the appointment.

Peter Ndegwa remains chief executive. The rule is effected when a successor will be chosen.

A related change makes the chief finance officer the automatic alternate director for the chief executive at board meetings, again while Vodafone Kenya stays above 50%.

Board seats and deadlocks

Vodafone Kenya can appoint one director for every complete 10% of Safaricom it holds. At 55%, that is five directors. The Cabinet Secretary to the National Treasury gets the same formula, which works out to two directors at 20%. The amended articles set a board minimum of seven directors and remove the previous maximum cap.

If the board splits on a matter and is still split after a second vote, the binding decision is the one backed by a majority of the directors appointed by Vodafone Kenya and the Treasury. Independent directors do not get the final word in a stalemate.

What the government held on to

Two consent rights survive the sale. Any material change to the Safaricom brand needs the consent of the Government of Kenya plus a 75% board majority. Expansion of the business into any market beyond Kenya and Ethiopia also needs Government consent.

The clause is drafted to override the rest of the articles. It opens with the words “notwithstanding anything to the contrary contained in these articles”, and the notice does not tie either consent right to a shareholding threshold.

Separate provisions require a majority of independent non-executive directors to be Kenyan citizens, and direct the board to encourage a predominantly Kenyan character in senior management.

Dividends and the administrative rest

Directors must now comply with the approved dividend policy when paying interim dividends or recommending final ones, unless shareholders approve a departure. Their discretion to set money aside in reserves is caught by the same rule.

The remaining resolutions are housekeeping. They update references from the Permanent Secretary to the Treasury to the Cabinet Secretary, clarify the definition of Vodafone Kenya Limited, revise who can call an extraordinary general meeting when the board lacks a quorum, make board quorum a simple majority, and recognise written and electronic board resolutions. The amended articles must be filed with the Registrar of Companies within 14 days of the meeting.

The same AGM, held virtually, approved a record KES 80.13 billion dividend for the year to March 2026, re-elected Edward Okaro to the board, and re-appointed Ernst & Young as auditor. The final dividend of KES 1.15 a share goes to shareholders on the register at the close of business on 4 August, payable on or about 4 September.

What to watch

Three things.

Chief executive succession is the first real test. Whenever Ndegwa leaves, his replacement comes off Vodafone Kenya’s list. The change lands during a run of senior departures, including Chief Financial Services Officer Esther Waititu, whose last working day was the day of the AGM. Boniface Mungania holds that role on an interim basis.

The board is the second. Vodafone Kenya has not named its five directors. Those appointments will show how much of the new structure it intends to use straight away.

The third is the courts. The High Court heard the substantive constitutional petition challenging the legality of the stake sale on 29 June and has not ruled. The Court of Appeal, when it lifted the freeze three days earlier, said plainly that it was not deciding whether the sale was lawful. Petitioners’ counsel Lempaa Suyianka said they would take the appeal court’s process to the Supreme Court.

For customers, nothing about M-PESA, calls or data changes because of this vote. What changed is who appoints the people setting Safaricom’s direction, and most of them are now appointed by Vodafone Kenya. The question the AGM could not settle is whether the sale that produced that majority was constitutional in the first place, and that answer is still with the High Court.