The Competition Tribunal has upheld a fine of Sh7.2 million slapped on Makini School after acquiring a campus in Kisumu town in 2019 without seeking approval from the competition watchdog.
The tribunal ruled that Makini School should have sought the approval of Competition Authority of Kenya (CAK), when it took over Bhayani nursery and primary school in Kisumu municipality.
The tribunal chaired by Daniel Ogola ruled that the failure to seek approval of the regulator was in violation of section 42(2) of the Act.
The school had challenged the penalty, which is equivalent to one percent of the turnover of Makini School for the year 2018 of Sh723,987,619, imposed by the competition watchdog, arguing that there was no evidence or legal foundation to support the conclusions and orders made by CAK.
While upholding the fine, the tribunal stated that customers are the ultimate asset for any profit-making organisation and that students are the customers in a school, who remain the main continuous revenue stream for any school that is run as a business.
“We are not persuaded by the Appellant’s (Makini’s) argument that students being natural persons cannot be classified as assets of a school. We would agree with the Respondent that a school without students is not in business,” the tribunal ruled.
According to the tribunal, when Makini School took over the school complex of Bhayani School, it was an operational undertaking.
Makini maintained it did not acquire a lease from Bhayani School as stated by CAK but it negotiated it with the landlord who is distinct and separate from the school and that Bhayani moved out before Makini embarked on renovation of the premises.