Kenya Broadcasting Corporation (KBC) Acting Managing Director Samuel Maina appeared before the Public Investment Committee to answer questions raised in the Auditor General’s report.
In the session that took place at Parliament buildings, the MPs sought answers on a Ksh 7 billion loan borrowed by KBC to buy equipment in 1989.
According to the Committee, KBC borrowed the said from Overseas Economic Co-operation Fund (OECF) Japan to spruce up its operations.
However, decades later, the state corporation was still struggling to clear the debt prompting the intervention of the state to bail it out.
Worse still, the MPs noted that the equipment brought with the funds have not been in use despite plunging the broadcaster in debt.
“Within 5 years of taking the loan, the loan is big and machines are lying idle, can the MD explain all this?” Peter Masara, Suna West MP asked.
Ksh2.8 billion debt
Further, it emerged that the government through the National Treasury had been servicing the debt over the years, further sinking the corporation into debt.
According to the committee, KBC had Ksh2.8 billion owed to the government as result of the money used to service the debt.
Further, the broadcaster had tax arrears owed to the Kenya Revenue Authority to the tune of Ksh189 million which put at risk of incurring penalties.
In his response the KBC Acting MD requested more time to gather enough information on the matters raised.
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“Chair, it looks like the developed world used KBC as a dumping site,” Maina told the MPs.
“I request that the Committee allows me to dig further into the issue to be able to respond from an informed position”, the Managing Director pleaded.
KBC Fraudulent salary system
Also, among the concerns raised was one on a salary loss of Ksh 22.5 million recorded in 2001 through electronic money transfer fraud.
In his response, the MD assured that disciplinary measures were taken, and that the corporation has since instituted reforms to avoid such fraud.
“We lost the money between September 1997 and December 2001 through the use of deficient payroll computer software,” Maina noted.
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“We have however invested in new software that has enhanced security that provides scrutiny and history of all transactions.”
The grilling was one of the planned sessions to investigate the financial mismanagements exposed in the Auditor General’s report regarding the committee.
Similarly, the Committee is also scheduled to hold more sessions with KBC’s management to address all questions on the station’s management in the period between 2001 to 2023.
