Written By John Mutiso 📝
The Auditor-General has ordered the cash-strapped Kenya Broadcasting Corporation (KBC) to collect the Sh231 million that 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 the KBC board’s resolution to collect the dues within three months of the pact’s expiration date in August 2020, failing which the pact would be terminated or suspended.
In December 2007, the State Broadcasting Corporation entered into a joint venture agreement with Ghetto Radio in which it agreed to provide a broadcasting frequency — 89.5FM — for use in the transaction.
The contract was valid for five years, and each party received 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 finalizing 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 impossible to determine whether KBC is getting good value for money in this deal.
According to the auditor, Ghetto Radio paid KBC Sh38.2 million based on the information available. She went on to say that audited financial statements from Ghetto Radio had not been verified for the duration of the joint venture, making it difficult to determine whether KBC received its fair share.
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