MPs mull review of KBC-MultiChoice deal, claim raw deal

Parliament is now considering reviewing the contract agreement between MultiChoice Kenya and the Kenya Broadcasting Corporation claiming the national broadcaster has been shortchanged.

The entities entered a deal in 1994 where KBC was to avail requisite frequencies while MultiChoice Africa Limited would provide initial funding and network infrastructure.

Through the deal, KBC was aimed at raising revenue to support its public service operations.

This was however not to be as KBC was locked out of dividends payouts, and has never earned dividends commensurate to its shareholding.

The national broadcaster was assigned 40 per cent stake in the collaboration which now the MPs claim is not value for money.

Members of the National Assembly Public Investment Committee on Social services, Administration and Agriculture on Thursday demanded the deal reviewed insisting that the private firm has given KBC a short end of the stick.

The committee chaired by Navakholo MP Emmanuel Wangwe demanded answers why the firm has not been remitting dividends to KBC despite holding 40 per cent stake in the agreement.

Apart from the dividends, the committee also wanted explanation why KBC was not involved in the policy decisions of the joint venture.

The only instance MultiChoice confirmed paying dividends to KBC was in 2011 where according the firm’s Finance Director Ruth Omondi Sh116 million was given to the broadcaster.

This however contradicts KBC’s audited accounts which indicate that only Sh96 million was received from MultiChoice.

“The money owed to KBC in dividends  as of 2011 is Sh116 million but according to audited books the national broadcaster was only paid Sh96 million. Tell this committee why there is a glaring anomaly and for what purpose the funds meant for dividends were diverted?” committee vice chair Caleb Amisi posed.

“Out of our engagement with MultiChoice we think that that KBC is not getting any value for money and that is why we are here. We think this agreement should be done away with unless MultiChoice thinks it would be good to review it so that it can restore confidence on the part of KBC,” added the Vice chair.

In her response, Omondi insisted that the Sh116 million was paid to the broadcaster even as the lawmakers questioned the Sh20 million variance.

“I was not around at the time the deal was brokered and I can only answer according to the records that I have. Documents in our possession indicate that all the dividends were paid to KBC in honouring of the agreement between the two parties,” Omondi told the committee.

The Wangwe led team also queried why KBC was only given two slots at the influential board membership while it holds almost the shares in the joint venture.

According to documents tabled before the National Assembly Committee, the broadcaster got two out of five board members.

KBC also had no representation at the management level which runs day-to-day activities of the organisation.

“Don’t you think that you are short changing KBC by walking away from certain aspects of the contract?’ posed Tetu MP Geoffrey Wandeto.

On Wednesday, the committee grilled Communication Authority of Kenya over the multi-million deal – CAK was involved in the transfer of KBC frequencies to MultiChoice.

The lawmakers wanted clarifications on the circumstances under which the authority agreed to transfer some KBC TV frequencies to GOtv.

“It is you who transferred the frequencies. CAK is part of the fraud. Why transfer frequencies if there was no relationship between KBC and GOTV?” committee chairman Emmanuel Wangwe (Navakholo) posed.

He spoke when the committee met with CAK represented by Christopher Kemei, the director universal service fund at the authority.

The National Assembly Committee has been probing the KBC/MultiChoice deal with a view of establishing whether there was value for taxpayers’ money.

The committee has also been trying to understand the nature of partnership between MultiChoice Kenya , KBC and Gotv.