KBC Board sacks Waweru over World Cup deal

BY JAMES RATEMO

Kenya Broadcasting Corporation (KBC) Board has sacked Managing Director, David Waweru and the firm's secretary Hezekiel Oira over impropriety in contract to broadcast FIFA world cup matches.

According to a statement from the board posted on the firm's website, KBC's Editor-In-Chief Waithaka Waihenya will continue serving in an acting capacity as the MD.

According to the board, the two have been sacked in pursuant to section 24 a) of the Employment Contract for the Managing Director and Section 15 (ii) of the KBC Code of Regulations.

The two were suspended in June this year when the deal involving the contract to broadcast the FIFA World Cup 2010 matches live from South Africa turned sour.

The KBC board of directors reportedly arrived at the decision after considering a report by the Inspectorate of State Corporations which has termed the deal as unethical and mischievous.

The agreement between KBC, Citizen and Radio Group Africa saw The Standard Group and Nation Media Group locked out of the World Cup broadcast rights.

This led to an outcry that prompted the Government to order that the deal, in which KBC entered an agreement to air the World Cup matches with Radio Africa Group investigated.

What the report says

In the report, the audit team questions why KBC senior managers opted for smaller players in the industry leaving out The Standard and Nation, which had made attractive proposals that would have earned the national broadcaster huge profits.

The report says major players were deliberatively left out of the lucrative business deal on the pretext that sub-licensing the rights to broadcast the 2010 World Cup matches would have contravened the contract the national broadcaster had entered with the world football governing body Fifa and African Union Broadcasters.

When KBC acquired the exclusive rights to broadcast the 19 editions of the World Cup, it invited bids for collaboration from other media houses. The decision was informed by business sense in which KBC would share the costs with highest bidders. Given their territorial reach and expertise, the two media houses made proposals in which they would share the proceeds from advertisement and sponsorships on 60: 40 ratio, with the national broadcaster pocketing the lion’s share.

Verdict

The Inspector General of State corporations and the Kenya Anti Corruption Commission were invited to launch investigations into the allegations.

In its verdict, the Inspector General said had KBC opened up the playing field the World Cup rights partnership would have been a highly profitable venture for the national broadcaster.

According to the various business models KBC had come up with, had it gone alone in broadcasting the matches in Kenya, it would have netted Sh64 million in profits.

Were it to partner with The Standard Group or Nation Media Group, it stood to earn Sh98.4 million from revenue of Sh160 million.

If it had outsourced an agency, Sh200 million would have been realised as revenue, out of which KBC would have banked Sh144 million.

Partnerships with smaller media houses was expected to earn the station Sh80 million from Sh160 million in revenue projection. Given these four scenarios, KBC resolved to invite bids from all media houses "to assist KBC in decisions making process."

However, there was no follow up as the Managing Director David Waweru opted to single-source "smaller" players.

In all these decisions, the report says, Waweru bypassed the Permanent Secretary and the board of directors who should have been kept abreast of all the decisions.

The Standard Group and Nation Media Group lost out under the pretext they were competitors with same territorial reach, hence they would deprive it of business.

Following the sackings, Finance and Administration Manager Musa Muthambi will continue to oversee the duties of the corporation secretary.