Kecobo invites EACC, DCI to probe disparities in royalties

"The letters to those two institutions’ CEOs have been prepared and dispatched."

In Summary

• Kutuny said they have written to Police IG to restore police enforcement during royalties collection and are preparing documents to transition to eCitizen payment. 

• MCSK came under criticism over royalties paid out to artistes in 2023 which some artistes termed as peanuts and not commensurate to their work.

KECOBO chairman Joshua Kutuny in a past media interview.
KECOBO chairman Joshua Kutuny in a past media interview.
Image: FILE

The Kenya Copyright Board has invited the EACC and DCI to probe what chairman Joshua Kutuny has termed as the disparity in amounts declared by the three Collective Management Organisations (CMOs).

In a statement on Wednesday, Kutuny said the Music Copyright Society of Kenya (MCSK), Kenya Association of Music Producers (KAMP) and Performers Rights Society of Kenya (PRISK) jointly collected Sh249,687,212.80 in royalties but there were disparities in amounts declared by individual entities.

“While KAMP and PRISK declared a collection of Sh249 million and they accounted for Sh61 million and Sh52.7 million, respectively, MCSK on its part declared receipts of Sh109 million representing a shortfall of Sh26 million,” Kutuny said.

He said PRISK accounted for Sh60 million with a royalty distribution of Sh7 million with Sh3 million pending distribution.

KAMP, he added, accounted for Sh53 million out of which Sh5 million was distributed and Sh1.9 million royalty is pending distribution.

“Cumulatively, MCSK declared total revenues of Sh139,295,094 comprising of Public Performance (109 million) and Mechanical income (thirty million)."

Kutuny said MCSK presented a list of members who received royalties in 2023 but on review, the Board of Directors found the information presented was scanty and at variance with details on joint collection.

He said details and amounts received for mechanicals in 2023 including monies received from foreign entities like PRS London, CAPPASSO and Google Ireland totaling Sh30 million were also not accounted for.

“In view of the above, I directed that the matter be handed over to the Ethics and Anti-Corruption Commission (EACC) and Director of Criminal Investigations (DCI) for investigations. The letters to those two institutions’ CEOs have been prepared and dispatched,” Kutuny affirmed.

"My office shall be following up on the progress at both DCI and EACC next week."

MCSK came under criticism over royalties paid out to artists in 2023 which some artistes termed as peanuts and not commensurate to their work.

MCSK boss Ezekiel Mutua defended the board from allegations of embezzlement of funds saying a document shared online by one of the artistes purporting to show that the board collected Sh109 million but distributed only Sh10 million was fabricated and malicious.

"A few weeks ago the same people circulating fake documents on social media were here claiming that MCSK was going to pay artists Sh1250. We proved them wrong and used a scientific distribution method that saw the highest earner get Sh757,000. Now they are back with fake documents," Mutua said on X on February 6.

The document had been shared on X by rapper Hubert Nukitare, popularly known as Nonini.

"You see the exact problem that is affecting the Kenyan Music Industry. These are the figures MCSK budgeted artists monies for the year that just ended 2023. This is a problem in all CMOs administration and directors benefit more than anyone," Nonini said.

In his statement, Kutuny appeared to lend credence to Nonini’s claims saying the Kecobo Board of Directors noted that royalties were paid only from quarter one of 2023 collections.

“All the Societies did not set aside royalties from collections in quarter two, three and four despite improved business environment. As per the Copyright (CMO) Regulations, the CMOs ought to have distributed at least Sh173 million or 70 per cent of that collection. This is clearly not the case here,” he said.

He pointed out that had the revenues been paid out in tandem with the Copyright Regulations, each artiste could have earned at least six times amount paid.

He said the artiste who received the highest amount of Sh757,092 would have pocketed Sh4,540,000 had the 70 per cent rule been observed.

“From our analysis, we note that artists from some regions like the coast, Nyanza and Central were underrepresented or left out completely. We shall demand explanations in this regard,” he said.

Kutuny noted that if the Copyright Regulations are strictly adhered to, royalties can change the life of artistes if managed in an efficient, open, and transparent manner.

He blamed the low payouts by all three CMOs to high operation costs in terms of staff salaries and poor collection of royalties for mechanicals.

“The income from broadcasting stations, PSV and new media revenue is grossly poor. The CMOs have made various proposals to improve this performance which Kecobo shall be acting on in due course,” Kutuny said.

Kutuny stated that MCSK defended itself saying lack of police enforcement, high legal fees and KRA tax arrears are principal reasons for the small royalty payments.

He said as a remedy, Kecobo has written to the Police IG to restore police to help in enforcement during royalties collection and that they are preparing the document necessary on the transition to the eCitizen payment platform.

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