Tag: Konvergenz Network Solutions

  • 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.

  • Duale Approves Billions for SHA Tycoons Despite System’s Technical Flaws

    Duale Approves Billions for SHA Tycoons Despite System’s Technical Flaws

    As millions of Kenyans struggle with a dysfunctional healthcare system, a well-connected consortium led by Safaricom PLC is set to pocket a staggering Sh104.8 billion from a hastily approved digital health platform that remains largely non-functional months after its scheduled launch.

    Fast-Tracked Deal, Slow-Motion Implementation

    Documents reveal that the proposal to develop the Integrated Healthcare Information Technology System (IHTS) for the Social Health Authority (SHA) received unprecedented approval speed.

    The Safaricom-led consortium, which includes Konvergenz Network Solutions and UAE’s Apeiro Ltd, submitted their proposal on May 15, 2024 and received notification of the award just one day later on May 16 – an extraordinary timeline for a multibillion-shilling government contract requiring multiple agency approvals.

    Despite Health Cabinet Secretary Aden Duale’s recent assertions that the system is “working seamlessly,” multiple reports confirm that implementation is significantly behind schedule.

    While the consortium was expected to begin receiving monthly payments of Sh500 million starting February 2025, CS Duale admitted this week that “no money has been paid” – an indirect acknowledgment that the system has failed to meet contractual milestones.

    Regulations Pave Way for Payments Despite Problems

    In what appears to be a move to accelerate payments, CS Duale gazetted digital health regulations on April 9 that establish the legal framework for reimbursing the consortium.

    These regulations were pushed through despite an ongoing court case filed by Busia Senator Okiya Omtatah challenging the legality of both the contract and the SHA itself.

    “The newly gazetted regulations might trigger payments before milestones are achieved,” warned a source close to the project who spoke on condition of anonymity.

    Under the contract’s payment structure, the monthly disbursements will progressively increase from Sh500 million to a peak of Sh1.065 billion between 2028 and 2032 – representing one of the most lucrative government contracts in Kenya’s history.

    Patients Bearing the Brunt

    While the consortium stands to reap billions, ordinary Kenyans face a healthcare system in crisis.

    According to recent reports, patients are being subjected to double SHA deductions from their salaries while simultaneously being forced to make out-of-pocket payments at healthcare facilities due to system failures.

    “I’ve been deducted 2.75% of my salary for SHA, but when I went to the hospital last week, their system was down,” James Kimani, a civil servant in Nairobi told reporters. “They told me to pay cash or go elsewhere. What exactly am I contributing towards?”

    The situation is particularly dire for the majority of Kenyans in the informal sector.

    While formal employees have no choice but to contribute through payroll deductions, reports indicate that only 3.5 million salaried Kenyans are currently carrying the entire financial burden of the system, with the informal sector – accounting for 80 percent of Kenya’s workforce – largely defaulting on payments.

    Complex Corporate Structure Raises Questions

    SHA Headquarters.
    SHA Headquarters.

    Behind the lucrative deal stands a web of recently incorporated companies with connections to powerful interests.

    Apeiro Ltd, registered in the UAE, is ultimately linked to International Holding Company (IHC), a massive investment firm with substantial ownership by the UAE royal family.

    Locally, Konvergenz Network Solutions’ ownership structure includes several recently formed entities and prominent lawyers, raising questions about potential conflicts of interest and political connections that may have facilitated the rapid approval process.

    The contract includes generous protections for the consortium, including clauses addressing currency fluctuations, tax changes, and inflation – effectively insulating them from financial risks while the Kenyan taxpayer bears the burden of implementation failures.

    System Plagued by Technical Issues

    Healthcare providers have reported numerous challenges with the SHA system, with many facilities reverting to manual claims processing due to persistent glitches.

    A transition team flagged significant gaps in the claims database, while more than half of private hospitals had not successfully transitioned to the SHA system as of early October 2024.

    The initial investment for the software and infrastructure is set at Sh34 billion, with the consortium expected to have the system fully functional by August 2026.

    However, industry experts question why Kenyans are being forced to contribute to a system that remains largely aspirational rather than operational.

    As the legal challenge to the contract continues in court, Kenyans remain caught between mandatory contributions to a system that doesn’t work and the increasing cost of healthcare.

    Meanwhile, the regulatory framework established by CS Duale ensures the consortium will soon begin receiving their billions – functional system or not.

    Under the contract signed on August 9, 2024, the consortium was set to receive Sh500 million monthly starting February 2025.

    While the procurement and contract signing was between the Ministry of Health and the consortium, the works coming out of the deal fall under the mandate of the Digital Health Agency (DHA).

    Starting 2026, the monthly payments were to increase to Sh650 million, and then to Sh900 million in 2027. Between 2028 and 2032, the monthly payments were to hit Sh1.065 billion.

    In 2033, the monthly payments would go down to Sh1 billion. Between January and April, 2034 they would drop to Sh900 million. In May, 2034 the Safaricom consortium would receive Sh708.1 million before getting a final Sh500 million installment the following month.

    Those payments are pegged on completion and implantation of certain software and physical infrastructure.

    Under the contract, the consortium was expected to have the system up and running within the first two years after signing. That means that by August, 2026 the system is intended to be working

    The initial investment in the software and necessary infrastructure is set at Sh34 billion.

    For ordinary citizens like Kimani, the promise of universal healthcare feels increasingly distant: “They’re quick to take our money but slow to deliver services. While we suffer, someone is getting rich off this chaos.”

  • 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.