KBC Boss On The Spot Over Ksh 7.5B Loan
On Monday, the Acting Managing Director of the Kenya Broadcasting Corporation (KBC), Samuel Maina, was placed under investigation regarding a loan facility acquired by the state-owned broadcaster from a Japanese lender.
When appearing before the National Assembly’s Public Investments Committee on Social Services Administration and Agriculture, Maina was questioned about the loan’s acquisition, utilization, and repayment scheme.
According to Maina, the loan was used by the national broadcaster to perform a facelift and enhance the station’s technologies during a generational shift in the media industry.
“The loan in question is Ksh7,543,422,121 which was obtained from a Japanese Overseas Economic Co-operation Fund, but KBC is not the one financing the loan,” Maina stated.
Maina also disclosed that the government, through the National Treasury, has been servicing the corporation’s loan over the years.
KBC was due to reimburse the National Treasury the Ksh2.8 billion that was transferred on its behalf, but the company has been unable to do so.
In addition, KBC has been unable to pay Kenya Revenue Authority (KRA) a total of Ksh189.4 million in value-added tax due to the losses they have been incurring.
Legislators were informed that the corporation was deemed to have violated the law and may be subject to penalties.
The acting managing director attributed the company’s losses to a series of decisions made by the previous management before he assumed office.
However, he reassured the legislators that the necessary policy frameworks had been established to address violations, such as the misappropriation of public funds by the corporation.
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“We lost the money between September 1997 and December 2001 through the use of deficient payroll computer software. Disciplinary action was initiated by the Board and the staff involved were dismissed.
“The issue was further taken to court through external lawyers. We have however invested in new software that has enhanced security that provides scrutiny and history of all transactions”, Maina revealed.
In their report review, the Committee chaired by Emmanuel Wangwe (Navakholo) identified additional instances of financial malfeasance committed by the corporation through its various activities.
For example, the Corporation recorded a net loss of Ksh500 million for the fiscal year ending June 30, 2001, and an accumulated deficit of Ksh6.5 billion as of the same date.
During the same fiscal year, the committee questioned a Ksh22.5 million salary loss attributable to electronic money transfer fraud.
In his response, Maina informed the committee that disciplinary action had been taken against the two officers suspected of committing the larceny.
The committee also requested information regarding procurement procedures, budgetary control, and inaccuracies in financial statements.
Maina is anticipated to submit several documents to the Committee in support of the suspicious transactions raised in the auditor’s report.
In addition, the committee is scheduled to conduct additional meetings with KBC management to resolve all audit questions about the period between 2001 and 2023.
KBC Boss On The Spot Over Ksh 7.5B Loan
