Why Vodacom is tightening its grip on Safaricom board

South Africa’s Vodacom has strengthened its influence over Safaricom after appointing two senior executives to the Kenyan telecommunications company’s board, following an increase in its ownership stake.

Vodacom appointed Mariam Cassim, its chief executive for financial technology (fintech), and Matimba Mbungela, the group’s chief human resources officer, as non-executive directors of Safaricom.

The appointments increase Vodacom’s representation on the Safaricom board to five directors, giving the South African telecommunications group a stronger voice in the management and strategic direction of the Nairobi Securities Exchange-listed company.

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The changes follow Vodacom’s acquisition of a 15 percent stake in Safaricom previously held by the Kenyan government. The transaction reduced the State’s direct ownership from 35 percent to 20 percent while increasing Vodacom’s interest to 55 percent.

The board changes also mark the end of Vodafone Group’s direct representation on Safaricom after the British telecommunications giant transferred its remaining direct stake to Vodacom. The restructuring is part of a wider shareholder agreement designed to reflect the new ownership structure.

How Vodacom secured more control

The Kenyan government has surrendered one of its seats on the Safaricom board to Vodacom, resulting in the departure of John Kipngetich Mosonik, a Kenyan technocrat who previously served as Principal Secretary in the State Department for Infrastructure.

Vodafone has also given up its board seat following the transfer of its remaining five percent direct interest in Safaricom to Vodacom. James Ludlow, Vodafone Group’s reward and policy director for human resources, consequently left the Safaricom board after serving for two years.

The changes mean Vodafone will no longer have a direct seat at Safaricom, even though its parent company continues to have significant indirect exposure to the Kenyan telecommunications business through its 65 percent ownership of Vodacom.

Vodacom Chief Executive Officer Shameel Joosub had previously outlined the planned board restructuring during an investor call, explaining that the South African group would take over the seats previously allocated to Vodafone and the Kenyan government.

“In terms of the board structure, currently we have one Vodafone, three Vodacom. It will all become Vodacom,” Joosub said.

“So you’ll have five Vodacom directors, and then you’ll have two government, four independents, and one exec, which is the CEO,” he added, describing the changes as a shift from the existing arrangement.

The five Vodacom representatives now include South Africans Mohamed Joosub and Raisibe Morathi, French national Murielle Lorilloux, and the newly appointed Cassim and Mbungela.

Cassim has held senior positions within Vodacom since 2017, while Mbungela has served as the group’s chief human resources officer since 2014. Their appointments bring additional senior Vodacom leadership directly into Safaricom’s boardroom.

Vodacom’s increased representation comes after the company completed a transaction that raised its ownership of Safaricom to 55 percent. The South African group bought the government’s 15 percent stake for Sh204.3 billion and also acquired Vodafone’s remaining direct interest, equivalent to about 4.9 percent.

The transaction effectively placed Safaricom under Vodacom’s control and prompted the signing of a new shareholder agreement governing key aspects of the company’s leadership and corporate governance.

The agreement provides Vodacom with greater influence over the appointment of Safaricom’s chief executive. The Safaricom board is required to appoint the CEO from a list of nominees provided by Vodafone Kenya Limited (VKL), the holding vehicle through which Vodacom owns its stake in Safaricom.

The arrangement gives Vodacom a decisive role in selecting the person who will occupy the company’s top executive position while preserving a Kenyan presence in other key areas of leadership.

What the deal means for Safaricom’s leadership

Despite its increased control, Vodacom has committed to retaining Kenyan leadership across most of Safaricom’s senior executive positions.

The shareholder agreement also provides for a Kenyan national to head the Safaricom board. Vodacom has undertaken, as far as possible, to ensure that the chairman is Kenyan, while the National Treasury will retain a role in the appointment of the chairperson.

“VKL further undertakes, insofar as possible, to ensure that the Chairman is of Kenyan nationality,” the agreement states.

The arrangement creates a balance between Vodacom’s expanded ownership and Kenya’s continued influence over the company. The government will retain two board seats despite reducing its ownership stake to 20 percent.

The restructuring is significant because Safaricom is one of Kenya’s largest and most strategically important companies, with extensive operations in telecommunications, mobile money and financial technology.

The company’s ownership changes also reshape the relationship between Safaricom, Vodacom and Vodafone. While Vodafone no longer directly owns shares in Safaricom, it will continue to benefit indirectly through its 65 percent ownership of Vodacom.

Based on the new structure, Vodafone will have an indirect interest of about 35.75 percent in Safaricom through its stake in Vodacom.

Vodacom’s control means Safaricom will also increasingly align with the group’s broader corporate framework. Under the shareholder agreement signed on December 3, 2025, Safaricom is expected to operate as a subsidiary of Vodacom Group and follow group policies, standards and procedures.

These include requirements covering financial reporting, governance, legal affairs, compliance, ethics, risk management, procurement and operations.

The transaction also included financial arrangements benefiting the Kenyan government. Vodacom paid Sh204.3 billion for the 15 percent Treasury stake and provided an upfront dividend of Sh40.2 billion on the State’s remaining 20 percent holding. The upfront payment is expected to be recovered from future government dividends.

The new board composition therefore represents more than a routine change in directors. It reflects a fundamental shift in Safaricom’s ownership structure, with Vodacom moving from being a major shareholder to exercising effective control over the Kenyan telecommunications giant.