The Kenya Broadcasting Corporation (KBC), the State Broadcaster, has faced a financial setback, receiving no dividends since 2017 despite holding a 40% stake in a joint venture established in 1994 with Multichoice Africa. According to former KBC Managing Director Mr. Waithaka Waihenya’s testimony before the Public Investments Committee on Social Services, Administration, and Agriculture, the joint venture was initiated in 1995.
“There was a co-location between KBC and Multichoice, so the relationship was completely symbiotic but premised on the envisaged partnership. And what I found was that in the JV, which I never saw KBC have before 40%,” Mr. Waithaka Waihenya said.
During this partnership, KBC, with its access and licensing to TV broadcast frequencies, allowed Multichoice Africa to utilize its resources, including the Signet platform and broadcast infrastructure located in ten regions across the country. However, a thorough examination of KBC’s accounts and the Auditor-General’s reports by the Committee revealed no revenue generated from this collaboration.
Initially, KBC was granted a 40% share in Multichoice Kenya, a local subsidiary of Multichoice Africa, while Multichoice Africa retained a 60% share. The deal required KBC to contribute 30% in direct funds and an additional 10% through co-location, incorporating extensive infrastructure such as land and telecommunication masts.
The Hon. Wangwe committee chair demanded to know the state of the agreement between KBC and Multichoice Company before the committee.
“In marketers, do you want to confirm that it is very serious and very informative that you never saw the JV? I was there for seven years, and for those seven years, you never saw the JV.” Hon. Wangwe questioned.
“I suppose that the partnership was so lucky that I never saw any of the proceeds. So I may not be able to tell you much about that; I have no details on that.” Mr. Waithaka Waihenya affirms.
The situation took a turn for the worse for KBC when the Supreme Court of Kenya, in Petition No. 14 of 2014, introduced a new licensing category, the Self Provisioning Signal Distribution Licence (SPSD). This allowed other players, including GOTV, to access broadcast frequencies.
In a letter dated February 28, 2017, the Communications Authority acknowledged KBC’s request to transfer frequencies from SIGNET, owned by KBC, to GOtv Kenya Limited, effectively relinquishing ownership of the frequencies.
This move stripped KBC of its longstanding broadcasting influence, leading to its current struggle to compete with private players in the media industry despite receiving state funding. Mr. Waithaka Waihenya informed the Committee that a former regional director for Multichoice Africa now holds a 30% share in GOtv.
Expressing concern, the Committee noted that KBC has become a mere shadow of its former self, grappling with financial challenges and an inability to generate revenue. Mr. Waihenya is set to submit supporting documents to the Committee in three days, reinforcing his revelations. The Committee has already questioned the Ag. Director of KBC, Mr. Samuel Maina, regarding this matter.
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