KBC Managing Director Samuel Maina sacked over Sh750bn payment
The former Acting Managing Director of the Kenya Broadcasting Cooperation, Samuel Maina, before the Public Investments Committee on Social Services, Administration and Agriculture at Parliament Buildings Nairobi on October 26, 2023.
What you need to know:
- Mr Owalo has appointed Communication Economic Expert Paul Macharia as the Acting Managing Director of KBC for six months.
- The CS has instructed the KBC Board to expedite the process of recruitment of a substantive Managing Director for the corporation.
The Acting Managing Director of the Kenya Broadcasting Corporation (KBC), Samuel Maina, has been fired with immediate effect.
In a letter dated December 19, 2023, Cabinet Secretary for ICT and Digital Economy, Eliud Owalo said Mr Maina has been sacked for committing the Government of Kenya to pay over Sh750billion in LCIA Arbitration without the approval of the Ministry, the National Treasury and the Office of the Attorney General.
Subsequently, Mr Owalo has appointed Communication Economic Expert Paul Macharia as the Acting Managing Director of KBC for six months.
At the same time, Mr Owalo has instructed the KBC Board to expedite the process of recruitment of a substantive Managing Director for the corporation.
Mr Maina, who was appointed in March 2022, has been accused of committing the Government of the Republic of Kenya to pay USD 5 billion to the London Court of International Arbitration (LCIA) Arbitration without seeking the concurrence of the Ministry, National Treasury and the office of the Attorney General and Department of Justice in total disregard of earlier instructions given to KBC on the matter.
Disciplinary action
"Mr Samuel Maina should proceed on suspension immediately and disciplinary action instituted against him by the Board," Mr Owalo said in the letter addressed to the Chairman of KBC Board, Eng Benjamin Maingi.
"With effect from December 19, 2023, I appoint Mr Macharia as the Acting Managing Director for a period of six months or upon the appointment of a substantive Chief Executive Officer pursuant to section 34 of the Public Service Commission Act, No. 10 of 2017," Mr Owalo said.
In the letter dated December 18, 2023, Mr Maina had committed to pay LCIA Arbitration No. 12223: Channel 2 Group Corporation vs Kenya Broadcasting Corporation.
"We have noted the contents of your email and wish to instruct you to proceed and offer Channel 2 Group Corporation the total sum of US Dollars 5 Billion in full and final settlement of the matter on a without prejudice basis," Mr Maina wrote.
In February 2022, the arbitration cost cast the spotlight on the risk that the key State agency poses to taxpayers on account of a 13-year legal dispute that could lead to billions in losses.
Terminated deal
Parliament’s Budget and Appropriations Committee in 2021 raised the red flag on the case, currently under arbitration in London, as one of the risks to taxpayers.
“The committee further observed that the Kenya Broadcasting Corporation is facing a lawsuit estimated at Sh40 billion in London UK for termination of a contract it had with Amjam TV, which later incorporated British Virgin Islands,” stated the Budget and Appropriations Committee in its report.
The dispute dates back to 2009 when KBC terminated a joint venture agreement with Dubai-based businessman Ajay Sheth, owner of Channel 2 Group.
According to court documents, KBC and Channel 2 entered a joint partnership in 2006 where the State broadcaster would provide technical equipment while the latter supplied the new digital station with staff, programming content and resources.
However, Channel 2 and Mr Sheth argue that KBC terminated the deal without notice in 2009, costing the businessman billions in foregone profits and expenses sunk into the joint venture.
The case is under arbitration in London where the KBC, and extension taxpayers, are staring at a Sh40 billion payout should the case go in favour of Channel 2.
