Tag: Adil Khawaja

  • The Chairman’s Conflicts: How Adil Khawaja’s Boardroom Empire Compromised Safaricom’s Governance

    The Chairman’s Conflicts: How Adil Khawaja’s Boardroom Empire Compromised Safaricom’s Governance

    When Adil Arshed Khawaja was elected chairman of Safaricom PLC’s board in early 2023, barely a hundred days after President William Ruto’s inauguration and only weeks after his own appointment as a non-executive director, the framing offered to the Kenyan public was one of merit.

    Khawaja, the managing partner of Dentons Hamilton Harrison and Mathews, one of Kenya’s oldest and most prestigious law firms, had chaired KCB Bank Kenya, sat on the boards of Kenya Power and the Kenya Wildlife Service, and built a reputation as a safe pair of hands.

    ‘Any President will not give a stranger the chairmanship of Safaricom,’ Khawaja told the Daily Nation in September 2024, in one of the more candid admissions a sitting chairman of Kenya’s most valuable listed company has ever offered to a journalist. ‘I have the knowledge and experience chairing many big companies.’

    What Khawaja did not say, but what the same interview inadvertently confirmed in granular detail, is that his appointment placed at the head of Safaricom’s boardroom table a man whose primary professional identity managing partner of a law firm representing the controversial Adani Group in litigation over the attempted takeover of Jomo Kenyatta International Airport sat in direct, structural tension with his fiduciary duties to Safaricom’s shareholders.

    Two years on, with Safaricom now engulfed in a data surveillance scandal that international rights organisations say may have facilitated enforced disappearances, with customer trust eroding visibly enough that ordinary Kenyans are publicly asking on social media whether the company serves citizens or the state, and with a foreign shareholder poised to take majority control of the company partly because its existing governance has proven so opaque, the question of who Adil Khawaja has really been working for at Safaricom deserves a far more rigorous answer than the one he gave eighteen months ago.

    The question of who Adil Khawaja has really been working for at Safaricom deserves a far more rigorous answer than the one he gave eighteen months ago.

    THE MAN WHO CALLS HIMSELF ‘MR FIX IT’

    Khawaja’s own words remain the single most damaging piece of evidence in this story, because they were not extracted under pressure.

    They were offered voluntarily, in a phone interview, by a sitting chairman of a Nairobi Securities Exchange-listed company explaining his own utility to the head of state. Asked about his role accompanying President Ruto on foreign trips a habit so consistent that Khawaja has appeared on the President’s travelling delegation more often than most Cabinet Secretaries Khawaja did not deny being described as the President’s ‘Mr Fix It.’ Instead he explained the function approvingly.

    ‘When you see the President going on a trip, he is going to talk to investors to invest in our country. He must have people that can help to provide the necessary advice,’ he said. He went further, describing Ruto as ‘my close friend of more than 30 years,’ adding, with a lawyer’s precision, ‘our friendship goes way back between our families. But I am not the President’s personal lawyer.’

    That last sentence is the crux of the matter. Khawaja is correct that he is not, formally, the President’s personal lawyer. He does not need to be.

    He is the managing partner of the law firm that employs the President’s son, that represents the Adani Group in litigation over Kenya’s most contested infrastructure transaction in a generation, and that simultaneously advises Konvergenz Network Solutions, a company sitting inside a Safaricom-led consortium that Khawaja, as Safaricom’s chairman, has publicly defended.

    The lines between ‘friend of the President,’ ‘managing partner of the President’s son’s employer,’ ‘lawyer for the company seeking the President’s airport,’ and ‘chairman of the listed company whose balance sheet is entangled with all three’ are not blurry because journalists have blurred them. They are blurry because Khawaja occupies all four positions at once.

    THE ADANI WEB: JKIA, KETRACO, AND DENTONS HHM

    The starting point for understanding Khawaja’s conflicts is the Adani Group’s attempted thirty-year, two-billion-dollar lease of Jomo Kenyatta International Airport a transaction so opaque and single-sourced that it triggered court petitions from the Kenya Human Rights Commission and the Law Society of Kenya, and a parliamentary committee hearing at which Treasury Cabinet Secretary John Mbadi was forced to articulate twenty-two conditions the government would impose on Adani before any deal could proceed.

    Adani Airports Holdings Limited, the Adani Group subsidiary at the centre of the JKIA bid, retained Dentons Hamilton Harrison and Mathews Khawaja’s firm to defend it in the High Court case brought by KHRC and LSK. Khawaja did not deny this. He embraced it. ‘Adani is one of the biggest companies in the world,’ he told the Nation.

    ‘They are already running the Port in Tanzania and they want to expand across the East African region,’ a remark that reads less like a conflicted executive distancing himself from a controversial client and more like a business development pitch for future Adani-Dentons engagements.

    Adani’s ambitions in Kenya were never confined to JKIA. The conglomerate was separately linked to a Sh95 billion contract with the Kenya Electricity Transmission Company, Ketraco, for high-voltage transmission infrastructure a deal that places Adani inside the same energy procurement ecosystem this publication has separately investigated in connection with Ketraco’s CEO recruitment irregularities.

    The pattern that emerges is one in which a single Indian conglomerate, represented in Kenya by the law firm of Safaricom’s sitting chairman, was simultaneously pursuing the country’s largest airport concession, a nine-figure power transmission contract, and through an Abu Dhabi-linked holding structure a 59.55 percent stake in the consortium that won an $800 million government healthcare technology contract in which Safaricom itself holds a 22.56 percent stake.

    THE SHIF CONFLICT: SAFARICOM IN BUSINESS WITH ADANI’S PARTNER

    This is where the conflict stops being theoretical and becomes structural. The Integrated Healthcare Technology System, the digital backbone of President Ruto’s Social Health Insurance Fund programme, was awarded to a consortium in which Safaricom holds 22.56 percent, Konvergenz Network Solutions holds 17.89 percent, and Apeiro Limited holds 59.55 percent. Apeiro is a subsidiary of Sirius International Holding, an Abu Dhabi-based investment firm that is itself a subsidiary of International Holding Limited a corporate structure layered specifically, this publication’s sources in the corporate governance space note, to obscure beneficial ownership.

    Sirius, critically, operates a joint venture with the Adani Group called Sirius Digitech Limited, which in mid-2024 acquired an Indian cloud computing firm, Coredge.io, in a deal both partners described as building a ‘sovereign AI and cloud platform.’

    In other words, Safaricom the company Khawaja chairs entered an $800 million government contract as a minority partner alongside a firm, Apeiro, whose ultimate parent is in active joint-venture business with the Adani Group, the same Adani Group that Khawaja’s law firm represents in litigation against the Kenyan state over JKIA and that is separately pursuing the Ketraco transmission contract. Meanwhile, the third consortium member, Konvergenz, is represented in the SHIF deal by Dentons HHM Khawaja’s firm. Khawaja’s explanation, offered to the Nation, was that ‘we gave some preliminary advice to Konvergenz’ and that the SHIF programme predated his appointment as Safaricom chairman, having been initiated under former President Uhuru Kenyatta.

    Both statements may be true. Neither resolves the conflict.

    A chairman whose own law firm has an active client relationship with one party to a consortium his company has entered as a shareholder, where that consortium’s largest partner sits in a corporate web connected to a conglomerate his firm represents in litigation against the state, is not a chairman who can credibly claim to be exercising independent oversight on behalf of Safaricom’s minority shareholders.

    A chairman whose own law firm has an active client relationship with a party to a consortium his company has entered as a shareholder is not exercising independent oversight on behalf of Safaricom’s minority shareholders.

    NICK RUTO AND THE FAMILY BUSINESS OF GOVERNANCE

    Layered onto this web is the employment of Nick Ruto, the President’s son and a qualified lawyer, at Dentons HHM the same firm, under Khawaja’s management, that represents Adani in the JKIA case. Khawaja’s defence of this arrangement, when pressed by the Nation, was procedural: ‘I didn’t even know that he had applied. We receive thousands of applications each year and he was one of the applicants, he went through the process and was selected.’ He further noted that the firm has previously employed other high-profile individuals.

    Procedurally, this may well be accurate. Substantively, it is beside the point. The issue is not whether Nick Ruto’s hiring followed Dentons HHM’s standard recruitment process.

    The issue is that the managing partner of the firm that employs the President’s son is simultaneously the chairman of the country’s most strategically important listed company, the President’s self-described travelling fixer, and a personal friend of three decades’ standing and that this entire arrangement sits atop a company, Safaricom, that handles the call records, location data, M-Pesa transaction histories, and digital lives of nearly fifty million Kenyans, data that the company has been accused of sharing with state security agencies implicated in abductions and killings.

    When the chairman overseeing that company’s data governance has this many threads connecting him to the very state apparatus whose access to that data is the subject of international human rights concern, ‘I didn’t even know he had applied’ is not an answer to the governance question. It is a deflection from it.

    RHINO CHARGE WHILE CUSTOMERS BURN

    The texture of Khawaja’s priorities has not gone unnoticed by ordinary Safaricom customers, whose complaints about disappearing data bundles, dropped calls, malfunctioning 5G routers, and customer care channels that loop callers in circles without resolution have intensified publicly on social media even as the company’s PR machinery continues to promote its Ethiopian expansion, its M-Pesa revenue growth, and its sustainability credentials.

    Kenyans on social media have pointedly noted that Khawaja’s public appearances alongside President Ruto extend beyond state investment trips into recreational territory, including the Rhino Charge, an off-road motorsport fundraiser for conservation in which Khawaja a longtime figure in Kenya’s wildlife conservation circles through his roles with the Rhino Ark Charitable Trust and the Kenya Wildlife Service has been a visible presence.

    The juxtaposition is not merely rhetorical.

    A chairman who has the time and inclination to accompany the head of state on overseas investment delegations and recreational motorsport events, while the company he chairs faces a deteriorating customer trust environment, an active data privacy scandal under High Court petition, and a looming change-of-control transaction that will determine the company’s leadership for a generation, is a chairman whose attention has visibly migrated away from the operational and governance failures piling up at Safaricom House.

    THE PATTERN REPEATS: KCB AND KENYA POWER

    This is not the first time Khawaja’s board career has intersected with institutions under public scrutiny.

    He served eight years as a director of KCB Group between 2012 and 2020, the final four as chairman of KCB Bank Kenya a period that fell within the same banking sector this publication has separately documented for its pattern of fraud exposure across East Africa.

    He also sat on the board of Kenya Power, departing in July 2020 as part of a broader reorganisation of the utility’s non-executive directors, a reorganisation that itself followed years of governance controversy at Kenya Power over procurement and tariff-setting irregularities.

    The pattern across Khawaja’s board career is consistent: appointment to chair or direct large, strategically important, state-adjacent institutions, followed by periods of governance controversy during his tenure, followed by his continued public framing as a uniquely qualified boardroom operator notwithstanding those controversies.

    WHAT THE VODACOM DEAL MEANS FOR KHAWAJA

    The irony of Khawaja’s position is that the very Vodacom transaction this publication has previously examined under which Vodafone Kenya Limited will gain the power to nominate Safaricom’s next chief executive once Vodacom’s stake rises to 55 percent explicitly preserves a Kenyan chairmanship.

    The shareholder agreement filed with the US Securities and Exchange Commission states that VKL will ‘endeavour, insofar as possible’ to ensure the chairman is of Kenyan nationality, and the Kenyan government’s own December 2025 conditions go further, mandating that the chairman ‘shall at all times be’ a Kenyan citizen.

    On the surface, this should protect Khawaja’s position even as the CEO’s office potentially returns to foreign-nominated hands.

    But this protection cuts in an uncomfortable direction for Khawaja personally. If the chairmanship is the one senior position at Safaricom that remains insulated from Vodacom’s incoming oversight, then the chairman becomes, by default, the single most important check on whatever new CEO Vodafone Kenya nominates at precisely the moment when Safaricom’s data governance practices are under the heaviest international scrutiny in the company’s history, with Access Now and a coalition of global civil society organisations having written directly to Vodacom demanding an investigation into whether Safaricom facilitated human rights abuses through its data-sharing practices.

    A chairman whose own professional and personal entanglements run as deep into the current administration’s commercial and family networks as Khawaja’s do is not obviously the independent check that moment requires.

    If Vodacom’s new management is serious about resetting Safaricom’s governance culture as this publication has argued it must be the chairmanship cannot simply be treated as the safe, untouchable seat in the boardroom. It may, in fact, be the seat that most urgently needs fresh eyes.

    THE QUESTION KHAWAJA AND NDEGWA CANNOT KEEP AVOIDING

    Kenyans on social media have begun to ask, in increasingly pointed terms, why the loudest complaints about Safaricom on data privacy, on service quality, on customer care, on corporate arrogance have all intensified during the same period of leadership.

    It is a fair question, and it deserves a fair answer, not from this publication, but from Khawaja and Ndegwa themselves, in public, under the same parliamentary scrutiny that Ndegwa has previously faced over the Vodacom transaction.

    Specifically: how many data requests from security agencies has Safaricom received since the 2024 protests, how many carried court orders, how many were rejected, and who inside the company holds the authority to approve access to subscriber data? What internal safeguards exist when the agencies requesting that data are themselves the subject of credible allegations of enforced disappearance?

    And, returning to the conflicts documented in this article, has Khawaja, as chairman, ever recused himself from any board discussion touching on Safaricom’s relationships with the Government of Kenya, given his firm’s representation of Adani, his firm’s employment of the President’s son, and his own description of his role as the President’s fixer?

    If the answer to that last question is no, then the chairman of Kenya’s most powerful company has spent the most consequential two years of its modern history sitting at the head of the table with an undisclosed, unmanaged, and apparently unaddressed conflict of interest on virtually every matter where Safaricom’s commercial interests and the Kenyan state’s political interests intersect which, for a company that handles state surveillance requests, runs government health technology contracts, and is the subject of a change-of-control transaction requiring government approval, is to say: almost everything.

    Safaricom’s customers built this company.

    Its 65 percent market share, its M-Pesa dominance, its position as the most profitable company in East Africa all of it rests on the trust of nearly fifty million ordinary Kenyans who use its network every day for transactions that define their economic lives. That trust is not Adil Khawaja’s personal asset to leverage on behalf of a law firm’s client list, a presidential travel itinerary, or a family friendship of thirty years’ standing.

    The silence from Safaricom’s boardroom on these questions, just as the silence on Ndegwa’s contract status, on the June 2024 internet outage, and on the surveillance allegations, is not discretion. It is an accumulating pattern of a board that has stopped treating accountability to the Kenyan public as a condition of its legitimacy.

  • Web Of Firms That Will Be Running Kenya’s New Healthcare System

    Web Of Firms That Will Be Running Kenya’s New Healthcare System

    As Kenyan transitions its healthcare system from the National Health Insurance Fund to the Social Health Authority (SHA), including the Social Health Insurance Fund (SHIF) and Healthcare Fund, a staggering deal worth hundreds of billions is unfolding, with a web of elites poised to reap the benefits.

    Among those set to profit are President , influential businessmen and powerful figures in the corporate world, all linked to the Ministry of Health.

    They will control the Social Health Authority (SHA), which manages three funds – the Primary Healthcare Fund, receiving Sh50 billion from the government; the Social Health Insurance Fund, raising Sh148 billion annually through member contributions and the Emergency, Chronic and Critical Illnesses Fund requiring Sh75 billion yearly.

    The SHIF deal, operational from October 1, 2024, aims to replace the National Health Insurance Fund (NHIF) with a new system requiring all households to contribute 2.75 per cent of their monthly income. This represents a significant increase for wealthier households, with some paying up to Sh27,500 monthly compared to the NHIF’s capped contributions of Sh1,700.

    At the heart of the deal is Apeiro Ltd, which holds the largest stake of 59.5 per cent in the consortium contracted to implement the UHC technology-based system.

    Other members include Safaricom, with a 22.6 per cent stake, and Konvergenz Network Solutions, with 17.9 per cent. Apeiro, a recently registered Kenyan company, has deep ties to international corporate giants and key figures in President Ruto’s circle.

    Apeiro is a subsidiary of Sirius International Holdings, which in turn is a part of Abu Dhabi’s International Holding Company (IHC), a firm with ties to India’s Adani Group. The company’s directors include Mwende Gatabaki, the wife of President Ruto’s economic adviser, David Ndii.

    “Our aim is to ensure that everyone can access , contributing to financially sustainable universal health coverage for all. We stand at the junction of Health and Technology, offering countries assistance throughout their healthcare transformation journey,” the company states on its website.

    David Ndii, a figure often mired in controversy, has faced scrutiny for his public statements on Kenya’s governance. He recently commented on corruption, stating, “We will leave Kenya as corrupt as we found it”.

    Safaricom, another major player in the SHIF deal, is Kenya’s leading telecommunications company whose board is chaired by lawyer Adil Khawaja.

    The SHIF is not the only deal under scrutiny. Mr Silas Simotwo, closely tied to an insurance company — a firm linked to President Ruto — has been appointed to chair the Digital Health Fund, a key component of the authority that will oversee SHIF operations.

    manages several healthcare funds, including the Primary Healthcare Fund (allocated Sh50 billion) and the Emergency, Chronic, and Critical Illnesses Fund, which requires Sh75 billion yearly.

    The NHIF transition comes amidst widespread public concern over the cost of contributions for the new fund and the overall transparency of the deal. Households across the country are required to contribute a portion of their income to SHIF, with wealthier families seeing their payments soar. This shift is a marked contrast to the previous NHIF model, where most families contributed a flat rate.

  • Adani Group Link In Kenya’s Sh104B Healthcare Plan

    Adani Group Link In Kenya’s Sh104B Healthcare Plan

    Apeiro Limited, the largest shareholder in the Safaricom consortium that has been awarded the contract for the technology-based system for the Universal Health Coverage (UHC), has business links to the Adani Group.

    The government has awarded the consortium a contract to provide an Integrated Healthcare Technology System (IHTS) for the UHC programme. Each of the three firms will contribute to the Sh104.8 billion needed to implement, maintain and support the IHTS system over the next ten years based on their shareholding.

    The Abu Dhabi firm owns 59.55 percent of the stake in the consortium, Safaricom has a 22.56 per cent stake, while Konvergenz Network Solutions Limited has a shareholding of 17.89 per cent.

    The firms will recoup their investment through monthly instalments that will be paid starting February next year, upon hitting the set performance milestones.

    Apeiro is a subsidiary of Abu Dhabi-based investment firm, Sirius International Holding.

    Sirius itself is a subsidiary of International Holding Limited (IHL), creating a web of companies that make it hard to track the beneficial owners.

    Sirius is currently in a joint venture with Adani in which they run a company known as Sirius Digitech Limited.

    In July this year, this joint venture announced the acquisition of Coredge.io Private Limited which they called a “cutting edge sovereign AI and cloud platform company”.

    The Adani Group has recently gained notoriety in Kenya after it emerged that the Indian conglomerate is in negotiations to operate the Jomo Kenyatta International Airport for a period of 30 years.

    The group is also in negotiations for a multibillion dollar long-term lease contract in Kenya’s energy sector.

    The business partnerships have for the first time created a link between Adani and the President William Ruto-championed UHC.

    Far less known, however, is the third member of the consortium, Konvergenz Network Solutions. Its website claims to operate in Kenya, Uganda and Tanzania, with its address listed as 4th Avenue Towers in Upperhill.

    “It is noteworthy that the Safaricom Consortium will invest the full project cost and recover their investment over 10 years by payment of monthly instalments (the instalment payments will commence from February 2025) based on the successful implementation of the project,” said Medical Services Principal Secretary Harry Kimtai in a press statement on Friday.

    The Safaricom consortium is said to have been picked to implement the big-money project through a Specially Permitted Procurement Procedure under the Public Procurement and Assets Disposal Act.

    The Adani link in the UHC project comes at a time the company is trying to put out fires that have been lit under its feet by civil society groups that are opposed to its $2 billion (Sh258 billion) takeover of the Jomo Kenyatta International Airport (JKIA).

    Last week, Adani argued in court that its JKIA takeover on a 30-year concession would be of “tremendous benefit to the Kenyan public”.

    “If the contract is signed as proposed in the PIP (privately-initiated proposal) the project will elevate the status of JKIA and also offer an increase in job opportunities to the people of Kenya,” said Adani.

    In Kenya, Adani is being represented by well-known law firm Dentons, Hamilton Harrison & Mathews, where lawyer Adil Khawaja is a senior partner. President William Ruto’s son, Nick Ruto, also works at the law firm.

    Mr Khawaja also currently serves as the chairman of Safaricom, which is the local face of the UHC contract.

    But it has also emerged that the events that led to Adani’s proposed takeover of JKIA kicked more than two years ago, when President Ruto took office.

    A study – whose findings are yet to be publicly released – that was undertaken by a Spanish firm in 2022 purportedly revealed a significant gap in the necessary infrastructure at JKIA to handle increased passenger traffic opened the door for the entry of Adani Group into Kenya.

    Spanish logistics and transport consultancy firm ALG Global was picked by the National Treasury’s Public Private Partnerships (PPP) Directorate to create a national aviation policy as well as the investments that the country needed to make in its aviation infrastructure in the medium-term to establish itself as a major aviation hub.

    ALG Global is a subsidiary of Indra Group, a Madrid-based holding company with interests in global defence, air traffic and space companies.

    The firm, which has 57,000 workers worldwide, made €4.343 billion (Sh624.5 billion) revenues in 2023.

    “ALG was engaged by Kenya’s Ministry of National Treasury and Planning to provide consultancy services for the development of an aviation policy for Kenya, and to review the proposed medium-term investment requirements for enhancing its aviation infrastructure and related services, particularly at Jomo Kenyatta International Airport in Nairobi,” says the Spanish firm on its official website.

    When he appeared before the Senate Committee on Roads, Transport and Housing last week, Roads and Transport Cabinet Secretary Davis Chirchir revealed that ALG’s study set the stage for the pivot towards public private partnerships (PPPs) for development of airports due to financial constraints at the exchequer.

    “The infrastructure deficit was an output of the National Aviation Policy study and Medium-Term Investment Plan of December 2022 done by ALG of Spain,” said Mr Chirchir.

    “The government is pursuing the PPP model on account of fiscal constraints in the face of acute infrastructure constraints,” he said.

    Once ALG finished the National Treasury assignment, it was also handpicked by the Kenya Airports Authority (KAA) to undertake a feasibility study on JKIA, which would later be used in the Adani deal.

    KAA revealed that ALG was not competitively recruited to undertake the feasibility study on JKIA and that it was singularly sourced.

    “We rode on their institutional memory and the fact that they had data so we recruited them directly to do for us the feasibility study,” said KAA acting Managing Director Henry Ogoye when he appeared before the Senate alongside Mr Chirchir.

    Additionally, ALG was also involved in the drafting of the Heads of Terms between KAA and Adani. Heads of Terms are preliminary agreements that precede substantive contract negotiations.

    Mr Chirchir also named Kenyan law firm Ashitiva Advocates as one of the firms that were involved in the drafting of the document, even as Senators threatened to amend the law to force State officials to promptly reveal any privately-initiated proposals submitted by investors.

    “I think the committee will be making a recommendation that we make an amendment to the law on PPP (that) immediately somebody arrives at your office with a so-called privately-initiated proposal, within 48 hours you must disclose,” said Nairobi Senator Edwin Sifuna.

    According to its website, Ashitiva Advocates describes itself as a specialist law firm in energy, natural resources and infrastructure, financial services and construction, telecommunications, media and technology.

    “I do not have this information with me at the moment. Please let me consult Nelson Ashitiva (a senior partner at the firm) and we will respond on Monday,” said a representative of the law firm when contacted by Nation Africa for further information on its role in the Adani-JKIA deal.

    Adani is also in talks with the Kenya Electricity Transmission Company (Ketraco) for a Sh95 billion contract for the construction of three high voltage power transmission lines and two substations.

    Adani is seeking to recoup Sh634.7 billion ($4.92 billion) from the investment over a period of 30 years.