Industry

KBC fails to collect Sh231m from Ghetto Radio in deal

KBC

Kenya Broadcasting Corporation headquarter in Nairobi. FILE PHOTO | NMG

The Auditor-General has told cash-strapped Kenya Broadcasting Corporation (KBC) to collect Sh231 million Nairobi-based FM station Ghetto Radio owes it for frequency services.

In her latest audit report on the State-owned broadcaster for the year ended June 2020, Nancy Gathungu raises the red flag over the delay by KBC management to collect the arrears from the FM station.

This is despite a resolution by the KBC board to collect the dues within three months from August 2020 failure to which the pact was to be terminated or suspended.

The State broadcaster entered into a joint venture agreement with Ghetto Radio in December 2007 where it was to provide a broadcasting frequency — 89.5FM — for use in the deal. The contract was valid for five years and the parties were entitled to an equal share of gross revenue.

“The Board during a special sitting held on 12 August 2020 resolved that the Corporation collects [sic] Sh231 million from Ghetto Radio Limited and the monies be paid within 90 days from the date of adoption of the report of the Board, failure of which the joint venture should be terminated or suspended,” says Ms Gathungu.

“As at the time of finalising the audit in February 2021, the (KBC) management had not effected the Board resolution on Ghetto Radio.”

Ms Gathungu says that in view of the above, it is not possible to confirm whether KBC is getting value for money in this deal.

The auditor notes that according to available information, Ghetto Radio has paid KBC Sh38.2 million. She added that audited financial statements from Ghetto Radio have for the duration of the joint venture not been verified, making it difficult to tell whether KBC got its rightful share or not.

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