Members of Parliament on Thursday unraveled how the Kenya Broadcasting Corporation (KBC) reportedly got the short end of the stick in a deal with Multichoice Kenya, a subsidiary of Multichoice Africa.
Appearing before the Public Investments Committee (PIC) on Social Services, former KBC Managing Director Waithaka Waihenya told the MPs that the State Broadcaster had not received a single cent in dividends since 2017.
This despite the corporation owning 40% of shares in a joint venture with Multichoice Africa initiated in 1994.
In his submissions, Waihenya explained that the national broadcaster got into a joint venture with Multichoice Africa Limited in 1995.
At the time, KBC enjoyed exclusive access and licensing to TV broadcast frequencies.
As such, Multichoice Africa was able to utilize KBC’s resources including its access to the TV frequencies through the Signet platform as well infrastructure such as broadcast masts.
A further perusal of the corporation’s books by the Committee and the Auditor-General’s reports showed that no revenue was generated from the partnership in the period.
According to a report by Parliament, KBC was initially offered 40% of shares in Multichoice Kenya, while Multichoice Africa remained with 60% shareholding.
In the findings of the Committee, the deal entailed KBC contributing 30% in direct funds to the venture and another 10% in form of co-location.
This, the Committee found, included KBC’s extensive infrastructure such as land and telecommunication masts.
However, KBC would later be dealt a blow in the deal when the Supreme Court of Kenya introduced a new licensing category – the Self Provisioning Signal Distribution License (SPSD).
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The Sigle Distribution License allowed other players access to broadcast frequencies.
subsequently, Multichoice Africa’s GOtv applied for the license and was granted access to its own frequencies.
When KBC lost the all-important leverage
Later in a letter dated February 28, 2017, the Communications Authority (CA) acknowledged receiving a request from KBC to transfer frequencies initially assigned to KBC-owned SIGNET to GOtv Kenya Limited.
In doing so, the transfer saw KBC cede the ownership of the frequencies.
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This move, in turn, eliminated the leverage that KBC had wielded since independence in matters broadcast and effectively sealed the fate of the broadcaster.
The discovery came amid recent struggles experienced in the national broadcaster.
Members of the PIC Committee were concerned that the broadcaster could no longer pay bills, nor compete with other players in the market due to financial constraints.
To support the revelations, the Committee tasked former MD Waihenya to submit several documents before the Committee in three days’ time.
