KBC Sinks Billions Deeper Into It's Debt Hole! Is This The End?

Piece by: Uncle Chim Tuna
Lifestyle

The Kenya Broadcasting Corporation is technically insolvent, in breach of the law and its mounting losses stand at Sh41.73 billion.These findings are contained in the report of the Auditor General for 2014-15. The report says KBC is operating on negative capital of Sh45.73 billion. This, the report says, has been caused by continuous losses by the national broadcaster.

KBC lost Sh5.34 billion in the last financial year and lost Sh5.5 billion in 2013-14. This loss has brought its liabilities to Sh46.73 billion, against its current assets balance of Sh1 billion. “The corporation is technically insolvent and its continued existence as a going concern is dependent upon the financial support of the government and its creditors,” the Auditor General says. The report also says that KBC owes Sh788.2 million in respect to statutory and other deductions, including Sh368 million owed as value added tax.

“It is not clear and management had not explained it and when the amount of Sh788,288,000, will be remitted to the respective authorities. The corporation is therefore in breach of the law and the unremitted amounts may attract fines and penalties,” the Auditor General says,

The Auditor General says KBC has not been servicing a 1989 Japanese loan guaranteed by the government, which has now accumulated to Sh45.2 billion.

Earlier, it was reported the corporation had serious financial and management problems. Communication Workers’ Union secretary general Benson Okwaro asked the government to bail out KBC. It was also reported the corporation had a bloated workforce of 1,200 employees, with fears that a third of them could be ghost workers gobbling up millions of shillings in salaries annually. Some unqualified staff are said to be illegally contracting third parties to perform their duties. Information Secretary Ezekiel Mutua said restructuring was underway.