KBC Director Faces Scrutiny Over Japanese Loan Mismanagement

The Acting Managing Director of the Kenya Broadcasting Corporation (KBC), Samuel Maina, faced intense scrutiny on Monday regarding a substantial loan acquired by the State-owned organization from a Japanese lender.

During his appearance before the National Assembly’s Public Investments Committee on Social Services Administration and Agriculture, Maina was tasked with elucidating the circumstances surrounding the loan’s acquisition, its utilization, and the repayment plan.

Maina explained that the loan, totaling Ksh7,543,422,121, had been secured from a Japanese Overseas Economic Co-operation Fund. However, he clarified that it was not KBC directly financing this loan.

Instead, the government, through the National Treasury, had been responsible for servicing the loan on behalf of the corporation. In return, KBC was obligated to reimburse the National Treasury. Nevertheless, KBC encountered difficulties in repaying Ksh2.8 billion, which had already been remitted on their behalf.

Furthermore, KBC failed to fulfill its valued-added tax obligation to the Kenya Revenue Authority (KRA), amounting to Ksh189.4 million, due to sustained losses recorded by the corporation. This lapse placed KBC in breach of the law, potentially leading to penalties.

Maina attributed these losses to actions taken by previous management before his tenure. He assured the legislators that comprehensive policy frameworks were now in place to address violations, including the misappropriation of public funds within the corporation.

He revealed that between September 1997 and December 2001, they lost money due to inadequate payroll computer software. The Board initiated disciplinary actions, resulting in the dismissal of implicated staff. Legal action was also pursued externally, and the corporation invested in more secure software to monitor transactions.

The Emmanuel Wangwe-chaired committee scrutinized other instances of financial mismanagement by the corporation. For example, in the fiscal year ending June 30, 2001, KBC reported a net loss of Ksh500 million, accumulating a deficit of Ksh6.5 billion by the same date. The committee questioned a salary loss of Ksh22.5 million due to electronic money transfer fraud during the same financial year. Maina informed the committee that disciplinary actions were taken against two individuals believed to be responsible for the theft.

Additional concerns raised by the committee related to procurement procedures, budgetary control, and inaccuracies in financial statements. Maina committed to providing the committee with various documents to support the transactions highlighted in the auditor’s report.

The committee is scheduled to hold further sessions with KBC management to resolve all audit queries spanning the period from 2001 to 2023.


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