Kenya’s state broadcaster KBC has been sued by a businessman for Kshs. 49 Billion over claims that it breached a contract regarding the launching of a TV channel and the digital migration process. The businessman owns Channel 2 group Corp and states that KBC terminated a joint venture in 2009 which would have led to the establishment of an entertainment and sports channel.
The businessman further claims that the broadcaster used information from a feasibility study on digital migration conducted by Channel 2 group Corp in establishment of a partnership with StarTimes for digital migration. According to the Daily Nation, the first deal was signed in September 2005, which would lead to the launching of Ajman TV owned by Channel 2. KBC and Channel 2 incorporated Channel Two Group Africa, a company that was to run the operations of the new venture under a 70:30 revenue sharing model. Nation further reports that KBC was to provide equipment, but some were found to be insufficient. As a result, the Channel 2 obtained funds for the procurement of a new transmitter, staff, billboards and hired an advertising company.
KBC on its part states that the venture was terminated owing to programming and poor financial performance. KBC says Channel 2 procured programmes that were unsuitable for Kenya audience while those provided were insufficient. The joint venture had projected that by August 2017, it would have earned a profit of US$481.9 million (Sh48.2 billion) which is the amount the businessman is suing the broadcaster for.
If successful the suit would threated KBC’s planned restructure and rebrand. The re-branding exercise will cost of Kshs. 9 Billion and is part of a five year strategic plan aimed at reviving the state broadcaster. In the new structure KBC will be split into two comprising of a public and commercial company.